Global trade volume is projected to moderate to 3.2 percent in 2025 amid growing uncertainties due to rising geopolitical tensions and emerging trade barriers, according to the United Nations flagship report.
The World Economic Situation and Prospects 2025 said this forecast also hinges on the outlook for commodity prices, and the potential weakening of services trade.
It said trade tensions between China and the United States, Canada and the European Union have intensified in 2024, as the latter group of countries has introduced new, high tariffs on industrial goods such as electric vehicles from China.
Citing the World Trade Organization, the UN report said, a few categories of trade remedial measures have reached new highs among the Group of Twenty (G20) countries, with the number of new anti-dumping measures doubling in the first half of 2024 in comparison with the year before, and the number of countervailing measures tripling over the same period.
Several studies have also analyzed the potential impact and cost of further trade fragmentation, highlighting the costly nature of measures restricting and impeding global trade, it added.
The report said global trade rebounded in 2024, growing at 3.4 percent —a notable increase from the modest 0.9 percent growth recorded in 2023.
It attributed this recovery primarily to the improvement in merchandise trade, which has increased by around 2.4 percent in volume terms from a 1-percent contraction in 2023.
“Key factors driving this rebound include easing inflationary pressures and enhanced export performance in the United States and several Asian economies, particularly China,” it added.
The report said global trade in services has continued to experience robust expansion, with a year-over-year growth rate of around 6.4 percent in 2024. Services trade now represents almost 25 percent of world trade.
“Travel services have played a crucial role in this growth. However, as tourism arrivals have largely returned to pre-pandemic levels, growth in this sector is expected to stabilize,” it said.
Meanwhile, global economic growth is forecast at 2.8 percent in 2025 and 2.9 percent in 2026, largely unchanged from the rate of 2.8 percent recorded in 2023 and estimated for 2024.
The report said many developing countries are still experiencing prolonged scarring effects from the pandemic and other shocks of the past few years.
“While the green transition and technological advancement could boost growth, any benefits that accrue may be disproportionately concentrated in developed economies. Many developing countries continue to struggle with mobilizing financing to invest in needed infrastructure, technology, and human capital and face challenges in leveraging their abundant workforce to move up the manufacturing and services value chains,” it added.
