Global trade is forecast to double by 2024

Recently, the Organization for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF) and the World Trade Organization (WTO) jointly forecast that total global trade will recover strongly this year after a recession in 2023 due to rising demand, prices and inflation.

WTO headquarters in Switzerland. Photo: Daily Sabah

Specifically, according to the OECD, global trade in goods and services is expected to grow by 2.3% this year and 3.3% in 2025. This is double the growth rate of just 1% last year.

In its latest Global Economic Prospects report, the IMF also forecast that total global trade will grow by 3% in 2024. The WTO, which does not provide a forecast for services trade, expects goods trade to grow by 2.6% in 2024, after falling by 1.2% last year.

Clare Lombardelli, chief economist at the OECD, attributed the growth to a “cyclical recovery” as trade grew alongside the global economy after the pandemic. Speaking to the Financial Times, she also predicted that China and East Asia in general would be the main drivers of economic growth in the coming period. Neil Shearing, chief economist at Capital Economics, said: “We have seen some green shoots in global trade. The manufacturing recession is now over.”

According to the Financial Times, countries in the European Union (EU) are benefiting greatly from the growth of global trade this year. In fact, the overall growth of the Eurozone increased by 0.3% compared to the previous three months, the strongest increase since the third quarter of 2022. Mr. Salomon Fiedler, economist at Berenberg Bank (Germany), commented: "We expected EU trade to grow this year, and now the recovery, especially in exports, is happening sooner than expected."

Specifically, according to data released on Tuesday, exports in Germany (the EU's largest economy) increased 0.9% compared to a month earlier, contributing to growth of 3.2% compared to the previous quarter. Imports into this economy also increased 0.3% in March and 1.7% in the first quarter. Meanwhile, in France, goods exports increased 2.9% in March compared to the previous month, reducing the country's trade deficit to a three-year low.

Similarly, Spain’s National Statistics Office said domestic and foreign demand contributed 0.2% and 0.5%, respectively, to the country’s first-quarter economic growth. According to the World Trade Monitor published by the Netherlands Bureau for Economic Policy Analysis, merchandise trade in the country returned to growth for the first time in a year in February.

Despite recent encouraging signs, however, global trade growth is not expected to return to pre-pandemic levels this year. According to WTO data, total growth in goods and services trade in 2024 is still 1.2% lower than the record high of 4.2% in the 2006-2015 period.

The WTO, along with the OECD and the IMF, also warned of risks to global trade from geopolitical tensions, regional conflicts and economic instability, as governments focus on national security, self-reliance and subsidies for domestic companies. According to the WTO, trade between the two blocs has grown 4% slower than trade between the two blocs since Russia launched its military campaign in Ukraine in 2022.

Furthermore, the US presidential election in November could also destabilize global trade. Former President Donald Trump has pledged to impose a 10% tariff on all US trading partners if he is re-elected, and has even hinted at imposing even larger tariffs on imports from China.

Source: https://congthuong.vn/thuong-mai-toan-cau-duoc-du-bao-se-tang-gap-doi-trong-nam-2024-319373.html