Sarah Travers
Projections from leading international bodies such as the OECD, IMF, and World Trade Organization paint a promising picture for global trade in 2024, forecasting a significant rebound after a sluggish year. Factors like surging prices, higher interest rates, and subdued demand slowed growth in 2023, but experts anticipate a robust resurgence this year.
According to OECD forecasts, global trade in goods and services is expected to increase by 2.3% in 2024, with an even more impressive growth rate of 3.3% projected for 2025. This marks a substantial acceleration from the modest 1% growth seen in the previous year, with China and East Asia playing key roles in driving this upsurge.
Early indicators already suggest a positive trend in global trade, with major economies experiencing notable boosts. Recent data from the Eurozone shows an uptick in trade, contributing to quarter-on-quarter growth of 3.2% in Germany, the region’s largest economy. Spain, benefiting from March’s Easter holidays, saw external demand bolster its first-quarter growth.
Italy and France also reported increases in goods exports, signaling a broad-based recovery in trade activity across the Eurozone. France, for instance, recorded a 2.9% rise in goods exports in March, leading to a reduction in its trade deficit to the lowest level in three years.
Beyond Europe, the IMF’s latest World Economic Outlook predicts a significant upswing in global trade volumes. The WTO also forecasts a rebound in goods trade by 2.6% in 2024, following a decline of 1.2% in the previous year.
Experts credit this resurgence to several factors, including the cyclical recovery of trade alongside broader economic growth and the gradual resolution of the manufacturing recession seen in 2023. The World Trade Monitor reports a return to growth in goods trade, largely driven by expansions in major economies like China and the United States.
However, despite these positive trends, global trade still lags behind pre-pandemic levels. Average annual growth rates between 2006 and 2015 stood at 4.2%, underscoring ongoing challenges posed by geopolitical tensions, regional conflicts, and economic uncertainties.
Recent geopolitical events, such as Russia’s invasion of Ukraine, have heightened these risks, leading to a slowdown in trade flows between geopolitically aligned blocs. Additionally, the upcoming US election adds another layer of uncertainty, with former President Donald Trump proposing tariff increases on US trading partners if re-elected, particularly targeting imports from China.
Looking forward, while the outlook for global trade is promising, sustained growth hinges on addressing underlying challenges and uncertainties. Governments and international institutions must navigate geopolitical complexities, foster cooperation, and implement policies conducive to trade expansion to ensure a resilient and inclusive global trading system.
As global trade gains momentum, its impact reaches beyond economic indicators, shaping the trajectory of nations and the interconnectedness of the global economy. With concerted efforts, the world can leverage the potential of trade as a driver of prosperity and sustainable development in the years ahead.
