The World Trade Organization (WTO) has updated its Global Trade Outlook and Statistics, forecasting a 2.7% increase in global merchandise trade for 2024. This marks a slight improvement over the 2.6% projection released in April.
The report highlighted a 2.3% year-on-year rise in global merchandise trade during the first half of 2024. The WTO expects this growth to continue moderately through the rest of the year and into 2025.
Global real GDP growth, measured at market exchange rates, is predicted to remain stable at 2.7% for both 2024 and 2025, according to the report.
One key development noted by the WTO is the reduction in inflation by mid-2024, which has allowed central banks to begin lowering interest rates. This easing of inflation is expected to boost real household incomes and encourage higher consumer spending, while lower interest rates should stimulate increased business investment.
However, the report also warned that divergent monetary policies across major economies could trigger financial volatility and fluctuations in capital flows, complicating debt servicing, particularly for lower-income countries.
“We anticipate a gradual recovery in global trade throughout 2024, but remain alert to potential risks, such as the possible escalation of regional conflicts, including those in the Middle East,” WTO Director-General Ngozi Okonjo-Iweala commented. She also noted that such conflicts could disrupt energy prices and shipping routes, potentially having far-reaching impacts beyond the directly affected areas.
Okonjo-Iweala stressed the importance of international cooperation to maintain economic stability and promote sustained global growth, emphasizing that these efforts are essential for improving the welfare of people worldwide.
Looking at regional trends, European exports are expected to decline by 1.4% in 2024, with imports dropping by 2.3%. Challenges have hindered the region’s trade in key sectors such as automotive and chemicals. In contrast, Asia’s exports are projected to grow by 7.4%, driven by strong manufacturing activity in countries like China, Singapore, and South Korea.
The report also noted a more positive outlook for global services trade, with an 8% year-on-year growth in the value of commercial services recorded in the first quarter of 2024. According to the WTO, This robust performance will likely extend into the second quarter.
