The United Nations Conference on Trade and Development (UNCTAD) forecasts a rebound in global trade, expecting it to hover around 3% this year after experiencing a 3% contraction in the previous year. Despite persistent geopolitical uncertainties, this optimistic outlook is attributed to rising demand for container shipping in recent months.
While logistical challenges such as disruptions in key shipping routes like the Red Sea, Black Sea, and Panama Canal remain a concern, the increasing demand for container shipping offers a glimmer of hope. Some East Asian and Latin American economies stand to benefit by integrating into supply chains affected by geopolitical tensions.
The report highlights the shifting landscape of trade policies, driven by domestic priorities and climate commitments. The adoption of trade restrictive measures and inward-looking industrial policies may impact international trade growth.
Looking ahead to 2024, projections are more positive, with moderating global inflation and improving economic growth forecasts indicating a reversal of downward trends. Additionally, the growing demand for environmental goods is expected to stimulate trade. However, uncertainties persist, underscoring the need for caution.
In 2023, most major economies, except Russia, experienced a decline in merchandise trade. Goods trade saw a 5% dip compared to 2022, with Russia particularly affected by a sharp decline in export levels tied to energy markets. However, there are signs of recovery, with China and India witnessing quarter-on-quarter growth in merchandise trade.
India, for instance, saw a 5% year-on-year growth in merchandise exports in the last quarter of 2023. However, on an annual basis, the country experienced a 6% contraction in export growth. These dynamics underscore the complex interplay of factors influencing global trade in the face of evolving geopolitical and economic landscapes.
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