GLOBAL TRADE OUTLOOK AND STATISTICS 2024
The Global Trade Outlook and Statistics published by the World Trade Organisation (WTO) is a critical aspect of the global economy, affecting the flow of goods and services across borders. The highly pro-cyclical nature of merchandise trade, which tends to fluctuate more than GDP during economic downturns and upswings, is a key feature of the global trade landscape. This can be attributed to the high share of manufactured goods in the merchandise trade compared to GDP, which is predominantly service-based. Consumption of manufactures, particularly durable and capital goods, is sensitive to real disposable income and cyclical developments, leading to a high import content in these goods.
The Global Trade Outlook and Statistics for 2024 highlights a complex and interconnected landscape, with factors such as inflation, monetary policy, and geopolitical tensions influencing trade dynamics. This summary covers key aspects of the global trade environment, including export and import growth, regional trade patterns, risks to the outlook, and recommendations.
EXPORT AND IMPORT GROWTH
The WTO forecasts that merchandise trade volume growth will rebound in 2024, with Africa’s exports expected to grow the fastest at 5.3%. The CIS region, North America, the Middle East, and Asia should all see moderate export growth, while European exports are expected to lag behind. Import growth is projected to be below average in most regions, with the exception of Asia (5.6%) and Africa (4.4%). Merchandise exports of least developed countries (LDCs) are expected to grow 2.7% in 2024, down from 4.1% in 2023, before accelerating to 4.2% in 2025.
REGIONAL TRADE PATTERNS
Europe made the biggest contribution to world trade volume growth in 2022 but was also primarily responsible for the decline in 2023. South America and the Middle East both saw 16% increases in imports over this period, while North America and Asia were each up 10%. Africa was the only region that saw its imports decline since 2019, with a cumulative drop of 5%.
RISKS TO THE OUTLOOK
The adverse trade environment that prevailed in 2023 is expected to ameliorate somewhat in 2024 and 2025, providing a boost to goods trade. However, geopolitical tensions and policy uncertainty could limit the scope of any trade rebound. Food and energy prices could again be subject to price spikes linked to geopolitical events, and choosing an appropriate pace of interest rate cuts will be challenging for central banks in advanced economies. Overall, risks are tilted to the downside, although there is some upside potential if trade in the European Union recovers faster than expected.
RECOMMENDATIONS
- Economies should aim to diversify their trade partners to reduce dependency on specific regions and mitigate risks associated with geopolitical tensions.
- To counteract below-average import growth in most regions, countries should focus on strengthening domestic demand through policies that promote consumption and investment.
- Central banks must carefully monitor inflation and adjust interest rates accordingly to prevent financial volatility and maintain economic stability.
- Governments and businesses should invest in resilient supply chains to minimize the impact of disruptions and ensure the smooth flow of goods and services.
- Encourage the adoption of sustainable trade practices to address environmental concerns and contribute to long-term economic growth.
In conclusion, the global trade outlook and Statistics is influenced by various factors, including the highly pro-cyclical nature of merchandise trade, the impact of real disposable income and cyclical developments on the consumption of manufactures, and the growth of other commercial services exports, particularly in the ICT and digitally delivered services sectors. While there are challenges, such as below-average import growth in certain regions, there are also growth opportunities, particularly in the LDCs and in the services sector.