Global Trade Surges in First Half of 2024, But Uncertainty Looms over Future Trends
The United Nations Conference on Trade and Development (UNCTAD) has reported positive trends in global trade for the first half of 2024. Goods trade increased by 1% in the first quarter of the year, while services trade grew by 1.5% on an annual basis. These positive trends are expected to continue, with UNCTAD predicting a 2% growth in world trade for the first half of 2024.
If these trends continue, global trade in 2024 is projected to reach nearly $32 trillion. However, it is unlikely to exceed the record level set in 2022. Developing countries, particularly China, India, and the United States, saw increased exports in the first quarter of 2024, while Europe and Africa did not experience any growth in exports.
UNCTAD highlighted that global trade related to green energy sectors and artificial intelligence products is in high demand compared to other sectors. The organization remains optimistic about global trade in 2024, despite potential challenges such as geopolitical issues and industrial policies reshaping trade patterns.
Inflation has remained positive but below 2% in the first half of 2024. Improving economic growth prospects and moderating global inflation indicate a positive outlook for global trade in 2024. However, ongoing negative developments such as geopolitical tensions could pose risks to global trade. Additionally, rising shipping costs could also have an impact on global trade flows.
Furthermore, there may be a possibility of interest rate cuts in the United States later this year which could potentially weaken the dollar and boost global trade by making American goods more competitive abroad or making imports cheaper for US consumers or businesses respectively.
Overall while the outlook for global trade in 2024 is promising it remains vulnerable to various external factors including ongoing negative developments such as geopolitical tensions or emerging industrial policies that could disrupt established trading relationships between nations.
