World trade to rebound in 2024, grow 2.6%: WTO

The WTO, however, lowered its forecast for growth in 2024 of world merchandise trade volumes to 2.6 per cent from 3.3 per cent it had projected in October last year as the impact of factors responsible for contraction in 2023 are still being felt.

Global trade volumes are expected to get back to the growth phase this year as consumption demand picks up in advanced economies after a tough 2023 which saw a contraction in cross border shipments, according to the World Trade Outlook of the World Trade Organisation (WTO) on Wednesday.

The WTO, however, lowered its forecast for growth in 2024 of world merchandise trade volumes to 2.6 per cent from 3.3 per cent it had projected in October last year as the impact of factors responsible for contraction in 2023 are still being felt.

In October the forecast was for 0.8 per cent trade growth in 2023 but the shipments actually declined 1.2 per cent as high energy prices and inflation continued to weigh heavily on demand for manufactured goods. The decline in world demand was also seen in India’s exports which fell 4.8 per cent to $ 431.4 billion, as per the commerce ministry data.

According to the WTO inflationary pressures are expected to abate, allowing real incomes to grow again — particularly in advanced economies — thus providing a boost to the consumption of manufactured goods in 2024. “A recovery of demand for tradable goods in 2024 is already evident, with indices of new export orders pointing to improving conditions for trade at the start of the year,” the WTO report said For 2025 the global trade regulating body has forecast 3.3 per cent growth. If the forecast is realised, Asia will make a bigger contribution to trade volume growth in 2024 and 2025, it added. In 2023 import demand fell sharply in Europe, declined in North America, remained flat in Asia, and increased in major fuel-exporting economies.