The United Nations has released a report forecasting a revival in global trade growth, projected to reach 2.4% this year. The recovery is attributed to the resurgence of trade in services, particularly within the tourism and transport sectors, as outlined in the World Economic Situation and Prospects report.
The report highlights promising signs of recovery in international tourism, notably in East Asia and Western Asia, with expectations of returning to pre-pandemic levels by 2024.
Despite these positive indicators, the report acknowledges a shift in international trade dynamics, with countries increasingly prioritizing the security of supply chains closer to home or from more resilient sources.
However, it cautions that this year's projected growth in global trade remains below the pre-pandemic trend of 3.2%. Factors contributing to this discrepancy include changes in consumer spending patterns, monetary tightening, a strong United States dollar, and geopolitical tensions.
The shift in consumer spending from goods to services, along with other factors such as weakening global demand and trade financing restrictions, has impacted exports from developing economies, resulting in setbacks in global trade growth.
In 2023, global trade growth experienced a significant slowdown, estimated at 0.6%, a stark decline from the robust 5.7% growth witnessed in 2022. The report attributes this weakness primarily to a slump in merchandise trade, exacerbated by the shift in consumer spending preferences towards services.
The report also highlights unresolved trade tensions, increasing trade-restrictive measures, and unexpected conflicts as additional factors contributing to uncertainties and weighing on trade activities globally.
However, amidst these challenges, there is a positive trajectory observed in trade in services, particularly in travel services, which continues to recover from the pandemic-induced downturn.
As the global economy strives for recovery, the resilience of trade in services, coupled with ongoing efforts to address challenges in merchandise trade, offers hope for a more robust and sustainable trade landscape in the coming years.
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