Global goods trade projected to rise 2.7% in 2024: WTO

The volume of world merchandise trade is likely to increase by 3 per cent in 2025.

However, rising geopolitical tensions and increased economic policy uncertainty continue to pose substantial downside risks to the forecast.

In the October 2024 update of ‘Global Trade Outlook and Statistics’, WTO economists said global merchandise trade rose by 2.3 per cent year on year (YoY) in the first half (H1) of 2024, and this should be followed by further moderate expansion in the rest of the year and in 2025.

The rebound comes on the heels of a 1.1-per cent slump in 2023 driven by high inflation and rising interest rates.

Inflation by the middle of 2024 had fallen sufficiently to allow central banks to cut interest rates. Lower inflation should raise real household incomes and boost consumer spending, while lower interest rates should raise investment spending by firms, the update said.

Europe is expected to post a decline of 1.4 per cent in export volumes this year; imports will meanwhile decrease by 2.3 per cent.

Asia's export volumes will grow faster than those of any other region this year, rising by as much as 7.4 per cent in 2024. The region saw a strong export rebound in the first half of the year driven by key manufacturing economies such as China, Singapore and South Korea.

Asian imports show divergent trends: while China's growth remains modest, other economies like Singapore, Malaysia, India and Vietnam are surging. This shift suggests their emerging role as ‘connecting’ economies, trading across geopolitical blocs, thereby potentially mitigating the risk of fragmentation, the WTO report noted.

South America is rebounding this year, recovering from weaknesses in both exports and imports seen last year. North American trade is largely driven by the United States, although Mexico stands out with stronger import growth compared to the region as a whole. Mexican imports are rebounding after a contraction in 2023, underscoring the country's growing role as a ‘connecting’ economy in trade.

Africa's export growth is in line with the global trend. It has been revised downward from the April forecast, driven by an overall revision of Africa's trade statistics, and a greater-than-expected weakening in Europe's imports, Africa's main trade partner.

In April, WTO economists projected a contraction in the Commonwealth of Independent States (CIS) region's imports for 2024, but now it is projected to post 1.1-per cent growth, driven by stronger-than-expected GDP expansion.

Merchandise exports of least-developed countries (LDCs) are projected to increase by 1.8 per cent this year, marking a slowdown from the 4.6-per cent growth recorded in 2023. Export growth is expected to pick up in 2025, reaching 3.7 per cent.

LDC imports, meanwhile, are forecast to grow by 5.9 per cent in 2024 and 5.6 per cent in 2025, following a 4.8-per cent decline in 2023. These projections are underpinned by GDP growth estimates for LDCs of 3.3 per cent in 2023, 4.3 per cent in 2024 and 4.7 per cent in 2025.

Fibre2Fashion News Desk (DS)