Global trade reached more than $32 trillion in 2022—quite resilient despite rising geopolitical tensions—but its growth turned negative during the year’s last quarter (Q4), according to the March 2023 global trade update by the UN Conference on Trade and Development (UNCTAD). Continuing trade stagnation for Q1 2023 is expected, but the outlook is more positive for the second half.

Global trade has proven to be remarkably resilient during 2022. The patterns of international trade are anticipated to become more closely tied to the transition towards a greener global economy.

Trade by developing countries was particularly weak during Q4 2022, with East Asia and Latin America underperforming.

While manufacturing trade declined, trade in environment-friendly goods continued to rise throughout the second half of 2022.

However, deteriorating economic conditions, the lifting of zero-COVID policies, and renewed concerns about inflationary pressures have resulted in a significant trade slowdown during Q4 2022.

The positive factors that are expected to compensate for the negative trends are improved economic outlook in major economies, decreasing shipping costs, weakening of the US dollar and a rise global demand for services.

The negative factors are geopolitical tensions; inflation, commodity prices and interest rates; and concerns of debt sustainability.

Other factors affecting international trade patterns are reshaping of global supply chains and trade policies for a green transition.

Global trade in goods was worth about $25 trillion in 2022—an increase of about 10 per cent from 2021—and trade in services totalled $7 trillion—an increase of about 15 per cent from 2021. Those record levels are largely due to robust growth in the first half of 2022.

Despite the decline in the value of trade in goods, trade volumes kept increasing during Q4 2022 and are expected to further grow during Q1 2023.

Growth in the volume of international trade suggests a resilient global demand for imported products, the UNCTAD report added.

Fibre2Fashion News Desk (DS)

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