UNCTAD reports that global trade growth has slowed following a record year.
According to UNCTAD, the UN trade and development agency, global growth will “become negative” in the second half of 2022.
According to the UN, commerce in commodities and services will surpass $25 trillion and $7 trillion, respectively, by the end of the year.
The slump started in the third quarter of the year, with products trading around 1% lower than from March to May.
UNCTAD estimations are based on national data.
Calculations by UNCTAD based on country statistics.
Values are falling.
According to UNCTAD’s global trade update, while services climbed by 1.3% in the third quarter, both goods and services are likely to shrink in value in the run-up to the end of the year.
According to the trade and development update, demand for foreign goods “has proven resilient” until 2022, with trade volumes increasing by 3% overall.
East Asian trade volumes have remained resilient, whereas South-South trade fell in the third quarter.
Overall, “geopolitical frictions, persistent inflation, and decreased global demand are projected to have a negative impact on global trade in 2023,” according to UNCTAD’s report highlights.
UNCTAD estimates are based on national data.
Source: Negative aspects
Lower economic growth anticipated until 2023 due to high oil prices, rising interest rates, continued inflation in many nations, and the depressed impact of the Ukraine war are among the negative causes identified.
Component and consumer goods prices are predicted to depress demand for imports, resulting in a decrease in the amount of international trade.
Record levels of global debt and rising interest rates “raise serious worries about debt sustainability,” raising pressure on the most indebted states and “amplifying vulnerabilities.”
On the plus side, ports and shipping industries have reacted to the COVID-19 pandemic’s supply chain crunch, with new ships entering service and port congestion substantially eased, according to UNCTAD.
Recent trade deals, such as the Regional Comprehensive Economic Partnership (RCEP) and the African Continental Free Trade Agreement (AfCFTA), “should come to fruition and offer some momentum” for the entire international system, according to the research.
Risk and uncertainty remain high for global supply chains in general, but efforts to build a greener global economy are likely to boost demand for ecologically friendly products while decreasing demand for items with high carbon content and fossil fuels, according to UNCTAD.