The WTO publishes its report on the prospects for global trade twice a year, which serves as an indicator to help us understand the evolution of trade flows in the short and medium term, as well as the main trading regions

Moderate recovery of global trade accompanied by structural challenges for the future.

The report primarily highlights that global trade faces a mixed scenario of moderate recovery and structural challenges for 2024 and 2025. After a 1.2% decline in merchandise trade volume in 2023, growth is expected to reach 2.6% in 2024 and 3.3% in 2025. These figures reflect a slow improvement in global demand, driven by a recovery in the consumption of manufactured goods and the stabilization of real incomes. At the same time, global GDP growth will remain at moderate levels, with an estimated 2.6% for 2024 and 2.7% for 2025.

Leadership of Asia and growth of Africa

Regionally, Europe played a significant role in the contraction of 2023, reducing global growth due to weakness in its imports and exports. In contrast, regions such as the Middle East and the Eurasian region (Russia and former Soviet republics) showed strong growth in imports. In 2024, Asia will lead the recovery, contributing significantly to both export growth (45%) and import growth (81%). Africa also stands out, with an expected increase of 5.6% in its imports.

Positive signs: Boost in trade of services (tourism and digital services)

On the other hand, the trade in services has shown greater resilience than merchandise trade. In 2023, services grew by 9%, reaching 7.54 trillion dollars, thanks to the recovery of travel and the rise in digital services. In contrast, merchandise trade contracted by 5%, reaching 24.01 trillion dollars, impacted by the decline in commodity prices such as oil and gas. 

Negative signs: Inflation and Geopolitical Trade Issues

On the negative side, it is important to note that geopolitical tensions and regional conflicts pose significant risks. The conflict in the Middle East has disrupted key routes such as the Suez Canal, increasing transportation costs and times. Additionally, the rise in protectionism and the fragmentation of supply chains are reconfiguring the global trade landscape. These tensions have fostered a trade environment more oriented toward geopolitical blocs and less diversified.

Meanwhile, inflation remains a determining factor. Although it is expected to gradually decrease in 2024, the effects of high interest rates still limit investment and the consumption of durable goods. This particularly affects advanced economies such as Europe, where energy prices have had a disproportionate impact. 

Good expectations overall

Despite the challenges, there are positive signs that make us optimistic in the short and medium term, highlighting the following:

• Global port traffic has shown a slight increase, with notable growth in Asia (8.9% in January 2024)
• A recovery is also observed in the indices of new export orders, indicating improved conditions for trade in 2024
• Global trade has shown resilience since the COVID-19 pandemic. However, the relationship between trade and GDP has changed drastically due to the existence of a more complex economic environment that is less dependent on global trade for economic growth 

In conclusion, the prospects for global trade in 2024 are moderately optimistic. While geopolitical and economic risks persist, the decline in inflation, the rebound in demand, and resilience in key sectors such as digital services suggest a gradual recovery. However, close attention must be paid to the evolution of commercial geopolitics in the coming months and the possible emergence of trade blocs and protectionist measures. 

For more information, you can visit the WTO website.

https://www.wto.org/english/res_e/publications_e/trade_outlook24_e.ht