In its recent "Global Trade Outlook and Statistics" report, the World Trade Organization (WTO) predicts a recovery in global trade for 2024. The report suggests that easing inflationary pressures will help boost real incomes, particularly in advanced economies, thereby increasing the consumption of manufactured goods. This positive trend is already visible with improved indices of new export orders at the start of the year.
WTO Director-General Ngozi Okonjo-Iweala stated: “We are making progress towards global trade recovery, thanks to resilient supply chains and a solid multilateral trading framework — which are vital for improving livelihoods and welfare. It's imperative that we mitigate risks like geopolitical strife and trade fragmentation to maintain economic growth and stability.”
Despite high energy prices and inflation affecting demand for manufactured goods, leading to a 1.2% decline in world merchandise trade volume in 2023, there was an increase in commercial services exports by 9% to US$7.54 trillion. Import volumes fell in most regions except for large fuel-exporting economies where imports were supported by strong export revenues.
The WTO estimates that global GDP growth will remain mostly stable over the next two years at 2.6% in 2024 and 2.7% in 2025. However, geopolitical tensions and policy uncertainty pose risks to this rebound. Food and energy prices may be vulnerable to spikes due to geopolitical events.
Ralph Ossa, WTO Chief Economist, commented: “Some governments have become more sceptical about the benefits of trade and have taken steps aimed at re-shoring production and shifting trade towards friendly nations. The resilience of trade is also being tested by disruptions on two of the world's main shipping routes: the Panama Canal, which is affected by freshwater shortages, and the diversion of traffic away from the Red Sea."
If current projections hold true, Africa's exports are expected to grow faster than any other region in 2024 at a rate of 5.3%, while Europe's export growth is anticipated to lag behind at just 1.7%. In terms of imports, Asia and Africa are expected to see significant growth.
World commercial services trade saw a rise despite declines in freight transport due to increased international travel and digitally delivered services. The value of digitally delivered services reached US$4.25 trillion in 2023.
The WTO has launched a new dataset on trade in services providing insights into changes over time due to digitalization and other factors such as COVID-19.