The value of global merchandise trade has seen a continuous decline since mid-2022.
Global trade in products and services contracted at an interannual rate of 3% in 2023, to US$31 trillion, after having reached a historical maximum in 2022, the United Nations Conference on Trade and Development (UNCTAD) reported this Thursday.
The value of global merchandise trade has seen a continuous decline since mid-2022.
In contrast, trade in services maintained growth for most of the period.
Specifically, UNCTAD detailed that trade in goods contracted 5%, around US$ 1.3 trillion in 2023; while trade in services increased 8%, approximately US$500 billion.
Its short-term forecast: for the first quarter of 2024, the agency considers a small but positive increase in both trade in goods and services.
Trade growth volumes remained modestly positive throughout 2023.
While the slightly positive trend in international trade volumes suggests resilient global demand for imported goods, the weakness of the US dollar also supported global trade volumes during 2023.
The decline in the value of global trade throughout 2023 was mainly due to reduced demand in developed countries and weak trade in the East Asia and Latin America regions.
The decline in raw material prices contributed to further reducing the value of international trade in 2023.
In contrast, trade in services saw growth for most of 2023. Among services, tourism and travel-related services rebounded strongly, increasing nearly 40%.
Significantly, the fourth quarter of 2023 signals a change from patterns seen in previous quarters.
Both merchandise and services trade stabilized on a quarter-on-quarter basis, indicating the end of the decline in global merchandise trade and the end of the strong upward trend in services trade.
UNCTAD's forecasts for 2024 are more optimistic. Overall, the moderation in global inflation and improved economic growth forecasts suggest a reversal of downward trends.
In addition, increased demand for environmental goods should boost trade in 2024. However, UNCTAD noted that the outlook for global trade in 2024 remains subject to significant uncertainties.
Persistent geopolitical tensions, rising shipping costs and high levels of debt hampering economic activity in many countries may continue to negatively impact global trade.
