Global trade in goods weakens from record 2022 levels Ship’s crew

By Bryce Baschuk (Bloomberg) —

International trade rose to a record $32 trillion in 2022, but goods trade growth is expected to rise just 1% in the first quarter and remain subdued this year due to a weaker global economy, a UN agency said.

“Although the economic outlook has improved, global trade growth is expected to remain subdued in 2023, with the possibility of a pick-up in the second half of the year,” said a report released Thursday by the United Nations Conference on Trade and Development.

Total merchandise trade grew 10% year-on-year in the first half of 2022 amid strong global demand, the report said. Growth began to slow in the second half — in the fourth quarter it fell by about $250 billion compared to the same period last year.

Meanwhile, trade in services is holding up better. It is forecast to rise 3% this quarter “as demand for information and communication technology services continues to grow and the travel and tourism sector continues to recover,” UNCTAD said.

Another positive factor is the growth in trade in green goods such as electric vehicles, plastic-free packaging and wind turbines, the report said. Other drivers are improved economic prospects in important economies, falling shipping costs, a weaker US dollar and high demand for services.

Downside macroeconomic risks to the UN forecast include rising inflation, high interest rates, rising government debt and a generally precarious geopolitical environment. The decoupling between the US and China is an additional factor weighing on global growth, the report said, as it could lead to further regionalization of international trade.

© 2023 Bloomberg LP

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