UNCTAD predicts a 5% decrease in global trade in 2023, with a pessimistic outlook for 2024 due to economic challenges.
The United Nations Conference on Trade and Development (UNCTAD) released its Global Trade Update, projecting a 5% contraction in global trade in 2023 compared to the previous year. The forecast predicts global commerce to amount to approximately $30.7 trillion, with goods trade expected to decline by nearly $2 trillion (8%) and services trade to increase by about $500 billion (7%). The underperformance of exports from developing countries was cited as a contributing factor to this decline.
Factors Influencing the Contraction
Factors contributing to the global trade contraction included diminished demand in developed nations, underperformance in East Asia economies, and a decrease in commodity prices. UNCTAD highlighted these influences as leading to a notable shrinkage in the trade of goods.
Outlook for 2024
UNCTAD expressed uncertainty and pessimism regarding the forecast for global trade in 2024. While some economic indicators suggest potential improvements, the organization anticipates negative influences from persistent geopolitical tensions, high levels of debt, and widespread economic fragility.