Today, the WTO and WTO released the Global Trade Outlook Report. The report shows that against the backdrop of a 1.2% drop in total global merchandise trade in 2023, an increase of 2.6% may be achieved this year, and an increase of 3.3% is expected next year.
Against this background, the WTO believes that as inflationary pressure weakens, the actual income of residents should return to a growth trajectory this year, especially in developed countries, which can boost commodity consumption. This trend has been evident since the beginning of 2024.
WTO Director General Ngozi Okonjo-Iweala (Ngozi Okonjo-Iweala) analyzed, “The recovery of global trade has made great progress, thanks to flexible supply chains and a solid multilateral trade framework — which is critical to improving living standards and the welfare of residents. We are committed to reducing the risk of geographical conflicts and trade fragmentation to ensure economic growth and stability.”
As high energy prices and inflation still have a significant impact on demand for goods, total global trade in goods fell by 1.2% in 2023. This decline was more evident in terms of value. Total global exports of goods fell 5% to US$24.01 trillion. The good news is that trade in services performed slightly better, with exports of commercial services trade rising 9% to 7.54 trillion US dollars, partially offsetting the impact of the decline in trade in goods.
Total trade imports have declined in most regions of the world, with Europe falling most significantly. Large energy-exporting economies are a special case because energy prices are at historic highs, and these countries' energy exports bring strong income, which greatly supports their imports.
At the same time, global GDP growth will remain stable over the next two years. This year, it will increase by 2.6%, and is expected to increase by 2.7% next year. The reason for the “inversion” situation where real GDP grew but total trade in goods declined was mainly due to inflationary pressure. This is particularly evident in North America and Europe. It is expected that the increase in goods trade in 2024 will basically match the increase in real GDP.
“The growth of global GDP requires growth in goods trade, so the ideal state should be for goods trade and GDP to grow at the same time, or the increase in trade is slightly higher than the GDP growth rate. This will help GDP to continue to grow.” WTO chief economist Ralph Ossa said.
The report analyzed that the previous stagnation in international commodity trade was mainly affected by high energy prices and inflation. Regional disputes and uncertainty about geopolitics and economic policies still pose great downside risks to economic expectations, all of which may be a hindrance to trade rebound. Food and energy prices are likely to continue to rise due to geopolitical events. For example, although the impact of the Red Sea crisis on global trade is currently limited, automobile manufacturing, fertilizer, and retail industries have clearly been adversely affected by delays in goods and rising transportation costs.
“Even so, geopolitical conflicts have had little impact on changes in trade patterns, and have not induced anti-globalization trends.” The report said. (Hao Qian from Geneva, Switzerland)