Geneva (TDI): The World Trade Organization (WTO) has projected a 2.7% increase in global merchandise trade for 2024, a slight upward revision from its previous forecast of 2.6% made in April.
The updated outlook was released on Thursday as part of the WTO’s Global Trade Outlook and Statistics report.
The report noted that global merchandise trade grew by 2.3% year-on-year during the first half of 2024 and is expected to maintain moderate growth through the remainder of the year and into 2025.
The projection for global real gross domestic product (GDP) growth at market exchange rates remains steady at 2.7% for both 2024 and 2025.
According to the WTO, inflation levels had declined enough by mid-2024 to allow central banks to start cutting interest rates.
This reduction in inflation is anticipated to boost real household incomes and spur consumer spending, while lower interest rates are expected to encourage increased investment by businesses.
However, the WTO warned of potential financial volatility as a result of diverging monetary policies among major economies, particularly as central banks reduce interest rates.
The report highlighted the challenges this could pose for debt servicing, especially in poorer countries.
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WTO Director-General Ngozi Okonjo-Iweala pointed to ongoing regional conflicts, particularly in the Middle East, as a possible risk to the global trade recovery.
She emphasized the potential for these conflicts to disrupt energy costs and shipping routes, which could have far-reaching effects on global trade.
“We expect a gradual recovery in global trade for 2024 but remain cautious about potential setbacks, including escalating regional conflicts,” Okonjo-Iweala said, urging collective efforts to maintain global economic stability and promote inclusive trade.
Trade in Europe
In Europe, the report forecasts a 1.4% decline in exports and a 2.3% decrease in imports for 2024, citing challenges in the region’s automotive and chemical sectors.
In contrast, Asia’s exports are expected to grow by 7.4%, driven by strong performances from key economies such as China, Singapore, and South Korea.
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The outlook for services trade is more optimistic, with an 8% year-on-year increase in the value of commercial services recorded in the first quarter of 2024.
This trend is expected to continue into the second quarter, reflecting stronger growth in services compared to goods trade.
