Global trade decreased by 1.2% in 2023

Global trade in goods will grow by 2.6% this year and by 3.3% in 2025. This is the forecast of the World Trade Organization (WTO) in its latest review.

In 2023, global trade turnover decreased by 1.2%, while exports of goods fell by 5% – to $24.01 trillion in value terms. Imports declined in most regions, but especially in Europe. The main exceptions were the major fuel exporting countries, whose imports were supported by high export earnings as energy prices remained high by historical standards.

WTO economists note that inflationary pressures are expected to ease in 2024. This stimulates the growth of real incomes, especially in advanced economies, which will boost the consumption of industrial goods.

«The recovery in demand for goods in 2024 is already evident, and new export order indices indicate an improvement in the terms of trade at the beginning of the year,» the report says.

Global real GDP growth in 2023 slowed to 2.7% from 3.1% in the previous year. In the next two years, the WTO expects stable growth rates: at 2.6% in 2024 and 2.7% – in 2025.

As for potential risks, the organization’s economists warn that geopolitical tensions and political uncertainty may limit the scale of the global trade recovery. In particular, it is noted that food and energy prices may again experience spikes related to geopolitical events. Regarding the crisis in the Red Sea: although the economic impact of the Suez Canal disruption has been relatively limited so far, some sectors, such as the automotive industry, fertilizer production, and retail, have already been affected by delays and higher freight costs.

As GMK Center reported earlier, last fall, the WTO revised its forecast for global merchandise trade growth to 0.8% in 2023. The worse expectations were due to persistent inflation, high interest rates, the tense situation in China’s real estate market and the war in Ukraine.