Global goods trade is expected to pick up gradually this year following a contraction in 2023 that was driven by the lingering effects of high energy prices and inflation, experts and economists have revealed in a new forecast.
According to the World Trade Organisation (WTO) Global Trade Outlooks and Statistics report released on Wednesday, the volume of world merchandise trade is projected to increase by 2.6 per cent in 2024 and 3.3 per cent in 2025 after falling to 1.2 per cent in 2023.
However, it added that regional conflicts, geopolitical tensions and economic policy uncertainty pose substantial risks to the forecast.
Economists noted that inflationary pressures are expected to abate, allowing real incomes to grow again, particularly in advanced economies, providing a boost to the consumption of manufactured goods.
Going further, the study said a recovery of demand for tradable goods in 2024 is already evident, with indices of new export orders pointing to improving conditions for trade at the start of the year.
“High energy prices and inflation continue to weigh heavily on demand for manufactured goods, resulting in a 1.2 per cent decline in world merchandise trade volume for 2023. The decline was larger in value terms, with merchandise exports down to US$ 24.01 trillion. Trade developments on the services side were better, with commercial services exports up 9 per cent to US$ 7.54 trillion, partly offsetting the decline in goods trade.”
Africa’s exports have also been projected to grow faster than those of any other region in 2024, up to 5.3 per cent. This, it added, is however from a low base, since the continent’s exports remained depressed after the pandemic.
The region’s expected growth is just slightly below 5.3 per cent, also from a reduced base after the region’s exports plunged following the war in Ukraine. Strong import volume growth of 5.6 per cent in Asia and 4.4 per cent in Africa should help prop up global demand for traded goods this year.
However, all other regions are expected to see below-average import growth, including South America (2.7 per cent), the Middle East (1.2 per cent), North America (one per cent), Europe (0.1 per cent) and the CIS region (-3.8 per cent).
Merchandise exports of least-developed countries (LDCs) are forecasted to grow 2.7 per cent in 2024, down from 4.1 per cent in 2023, before growth accelerates to 4.2 per cent in 2025.
