The WTO has sharply downgraded its forecast for world trade in 2025

The World Trade Organization (WTO) has sharply downgraded its forecast for global merchandise trade in 2025. It is now expected to decline by 0.2% instead of the 3% growth that was forecasted in October last year.

According to the WTO report, the forecast is based on the situation with foreign trade duties as of April 14. If the situation worsens, global trade could fall by 1.5% this year. In 2026, a moderate recovery of 2.5% is expected.

Global trade in commercial services, according to the organization’s analysts, is expected to grow by 4%, which is slower than previously expected.

According to WTO Director-General Ngozi Okonjo-Iweala, she is deeply concerned about the uncertainty surrounding trade policy, including the confrontation between the United States and China.

“The recent de-escalation of tariff tensions has temporarily eased the pressure on global trade. However, the ongoing uncertainty threatens to become a brake on global growth with serious negative consequences for the world’s most vulnerable economies,” she said.

The latest forecast shows a change in the situation compared to 2024, when the volume of world trade in goods grew by 2.9% and global GDP by 2.8%. This makes 2024 the first year since 2017 (excluding the recovery period after the COVID-19 pandemic) when merchandise trade grew faster than production.

In 2025, the impact of recent tariff measures on merchandise trade is expected to vary sharply across regions.

WTO economists expect global GDP to grow by 2.2% in 2025, before recovering slightly to 2.4% in 2026.

At the same time, the international rating agency Fitch Ratings, in a special update of its quarterly forecast for the global economy, downgraded its expectations for global GDP growth by 0.4 percentage points compared to its March estimate to less than 2%. The agency notes that this is the worst result for the global economy since 2009, excluding the period of the coronavirus pandemic.

On April 9, the US President announced a 90-day pause on all “reciprocal” duties for trading partners, with the exception of China, leaving the total at 10%.