WTO Latest Report: Global Trade Continues to Rebound, with Asian Exports Leading the Way

The World Trade Organization (WTO) has released its latest update to the World Trade Outlook and Statistics report, predicting a continued recovery in global trade, with Asian exports taking the lead. The report, issued on October 10, offers insights into the current state and future outlook of global trade.

According to the WTO, global merchandise trade is expected to grow by 2.7% in 2024, slightly higher than the previously forecasted 2.6%. This growth reflects a gradual recovery from the challenges faced in previous years, particularly the impact of inflation and interest rate hikes in 2023, which caused a 1.1% contraction in global merchandise trade. However, the report indicates that the first half of 2024 has already seen a rebound in global trade, with trade volumes increasing by 2.3% year-on-year. This upward trend is expected to continue into the second half of 2024 and into 2025.

Notably, Asia is poised to be the main driver of this recovery, with exports from the region forecasted to grow by a robust 7.4% in 2024. This impressive growth is being fueled by major manufacturing economies such as China, Singapore, and South Korea, which have seen a strong rebound in exports in the first half of this year. In contrast, Europe is projected to be the only region where trade volumes will decline, with exports falling by 1.4% and imports by 2.3%, primarily due to a decline in exports of automobiles and chemicals.

The report also highlights the relatively stronger growth prospects for global services trade compared to merchandise trade in the short term. In the first quarter of 2024, services trade, measured in US dollars, increased by 8% year-on-year, and the second quarter is expected to maintain this momentum. This trend underscores the resilience and adaptability of the services sector, which has shown stable growth despite the disruptions caused by the COVID-19 pandemic and related restrictions.

WTO Director-General Ngozi Okonjo-Iweala noted that while global trade is expected to recover gradually in 2024, potential risks remain, particularly geopolitical tensions in the Middle East, which could indirectly affect global energy costs and shipping routes. Furthermore, the report cautions against the risks associated with diverging global monetary policies and sudden changes in exchange rates, which could lead to financial instability, especially for less developed countries.

Despite these risks, the report outlines several positive factors supporting the recovery in global trade. As major economies experience cooling inflation, central banks in developed economies have begun to lower interest rates, which, combined with lower inflation rates, can increase household real income, thereby promoting consumption, investment, and supporting the gradual recovery of global trade.

In addition, the report emphasizes the growing importance of "transit trade countries" in global supply chains and trade, particularly Mexico and Vietnam, followed by India. These countries are increasingly acting as bridges for trade between major economies, facilitating the flow of goods and services despite geopolitical tensions.

Overall, the WTO's latest report offers a cautiously optimistic outlook for global trade in 2024 and beyond. While risks remain, the recovery in trade volumes, particularly in Asia, and the stable growth of services trade suggest that the global economy is resilient and adaptable. As countries continue to navigate the complexities of geopolitical tensions and economic policies, the report serves as a valuable guide for policymakers and businesses alike in navigating the ever-evolving landscape of global trade.