Global trade sees growth in Q1 2024, shares UNCTAD

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Global trade trends turned positive in the first quarter of 2024, with the value of trade in goods increasing by approximately 1 per cent quarter-over-quarter and services by about 1.5 per cent, according to the latest Global Trade Update released by UN Trade and Development (UNCTAD) on July 2.

The trade growth was primarily driven by significant increases in exports from China (9 per cent), India (7 per cent), and the US (3 per cent).

Conversely, Europe’s exports showed no growth, and Africa’s exports decreased by 5 per cent.

UNCTAD‘s report anticipates that this increase will add approximately $250bn to trade in goods and $100bn to services trade in H1 2024 compared to H2 2023.

The short-term trade outlook remains cautiously optimistic as global GDP growth forecasts are steady at around 3 per cent for 2024.

The report suggests that if these positive trends persist, global trade in 2024 could reach almost $32tn, although it is unlikely to surpass the record levels seen in 2022.

South-South trade rises

Trade in developing countries and South-South trade increased by about 2 per cent in both imports and exports during Q1.

In contrast, developed countries saw flat imports and a modest 1 per cent rise in exports.

While South-South trade rose by 2 per cent, its value remains significantly below 2022 levels, with its four-quarter moving average still negative at -5 per cent.

Clean energy, AI do well, reveals UNCTAD report

The report highlights significant trade growth in the green energy and artificial intelligence sectors.

The trade value of high-performance servers rose by 25 per cent compared to the first quarter of 2023, while other computers and storage units saw an 8 per cent increase.

The trade value of electric vehicles also grew by about 25 per cent between 2022 and 2023.

Geopolitical challenges, policies have an impact

Despite these positive trends, the outlook for 2024 is tempered by potential geopolitical issues and industrial policy impacts.

The report notes that geopolitical tensions, rising shipping costs, and emerging industrial policies could reshape global trade patterns.

Since late 2022, there has been an uptick in “friend-shoring,” favouring countries with similar geopolitical stances.

Although this trend has begun to soften, the report warns that an increasing focus on domestic industries and trade restrictions could hinder international trade growth.