The United Nations Conference on Trade and Development (UNCTAD) has stated in its just released March Global Trade Update that while global trade is poised to rebound this year, in effect reversing the downward trend observed last year, other factors including “geopolitical issues and shipping disruptions” impacted by international conflict could stifle what, in different circumstances, might have been a much more positive outlook.
UNCTAD reports that overall, the value of global trade fell by 3% in 2023. For trade in goods, the value shrunk by 5% while transactions grew by 8% for trade in services.
Arguably, the most poignant observation made in the UNCTAD 2024 report was that during last year, trade among developing countries and South-South trade performed worse than the global average, a reflection of a generous measure of sluggishness in the performances of the economies of poor countries.
The UNCTAD report noted, however, trade in environmental products grew in 2023, citing the profusion of sales, reflective of a global sensitivity concerns that were persistently expressed about the degraded bona fides of the environment.
Significantly and notwithstanding the dimensions of ‘doom and gloom’ that have crept into discourses on the environment, UNCTAD asserts that the outlook for 2024 is positive though the UN agency concedes that enduring geopolitical issues and shipping disruptions fuel uncertainties.
According to the UNCTAD report, global trade dipped 3% to $31 trillion in 2023 after peaking in 2022. The downturn, the UN agency says, was driven by less demand in developed economies and weaker trade in East Asia and Latin America. The downturn, it said, was driven by a 5% fall in trade in goods.
According to the report, however, trade in services “bucked the negative trend,” growing by 8%, fuelled by a nearly 40% surge in tourism and travel-related services.
Predictably, developing countries reportedly felt the brunt of the overall decline in trade, with their imports and exports falling by 5% and 7%, respectively, compared with a 4% drop in imports and 3% in exports for developed countries.
Most regions saw negative trade growth in 2023. The exception was a significant increase in intra-regional trade in Africa, the UNCTAD report says.
