In a recent Global Trade Update, the United Nations Conference on Trade and Development (UNCTAD) has released a projection indicating that global trade is expected to contract by 5% in 2023 compared to the previous year. The report also presents a cautious outlook for 2024.
According to UNCTAD's findings, the global commerce volume for the current year is estimated to be approximately $30.7 trillion. While trade in goods is expected to contract by nearly $2 trillion in 2023, marking an 8% decline, there is a more optimistic outlook for services trade, which is anticipated to grow by approximately $500 billion, or 7%.
UNCTAD points to several factors contributing to the contraction in global trade, including reduced demand in developed nations, sluggish economic performance in East Asian economies, and declining commodity prices. These factors have collectively played a role in the notable decline in the trade of goods.
Looking ahead to 2024, UNCTAD's forecast for global trade remains uncertain and leans towards a pessimistic outlook. Despite certain economic indicators suggesting potential improvements, persistent geopolitical tensions, elevated levels of debt, and widespread economic fragility are expected to continue influencing global trade patterns negatively.
In summary, the UNCTAD report highlights the challenges confronting global trade and underscores the need for international cooperation and strategic measures to address the various factors affecting trade, with the aim of supporting its recovery in the coming years.