By Jaya Ramachandran
GENEVA | 5 December 2024 (IDN) — Global trade is poised to hit an all-time high of nearly $33 trillion in 2024. This marks a growth of 3.3% or $1 trillion increase driven by a 7% rise in trade in services, according to the latest Global Trade Update by UN Trade and Development (UNCTAD).
The upsurge highlights resilience in world trade despite persistent challenges. Robust growth in services trade, up 7% for the year, accounted for half of the expansion, while goods trade rose 2% but remained below its 2022 peak.
Besides, developing economies face slower trade growth, but high-growth sectors like information and communication technology (ICT) and apparel offer opportunities for diversification and resilience.
Stable global growth and easing inflation create a window for developing economies to strengthen their trade position amid rising geopolitical uncertainties.
Opportunities amidst uncertainty
According to UNCTAD’s Update, developing economies, traditionally strong drivers of global trade, faced headwinds in 2024, with imports contracting 1% and South-South trade falling by the same margin in the third quarter. In contrast, developed economies led Q3 growth, with stable demand driving a 3% rise in imports and 2% in exports.
Despite these challenges, opportunities remain for developing economies to capitalize on high-growth sectors. ICT and apparel trade surged, with increases of 13% and 14%, respectively, in the third quarter 2024. This growth underscores the potential for diversification and entry into value-added industries. Stable global growth forecasts and easing inflation also present a chance to build resilience in 2025.
While ICT and apparel showed strong momentum, traditional sectors critical to developing economies faced declines. Energy trade fell 2% for the quarter and 7% for the year, while metals trade contracted by 3% both quarterly and annually. Automotive trade dropped 3% in Q3 but is expected to end the year with modest 4% growth.
A call for strategic action
UNCTAD urges developing economies to adopt targeted policies that enhance trade diversification and invest in high-value sectors to mitigate risks. “Trade remains a cornerstone of sustainable development,” said UNCTAD Secretary-General Rebeca Grynspan. “To seize the opportunities in 2025, developing economies need coordinated support to navigate uncertainty, reduce dependencies, and strengthen their links to global markets.”
UNCTAD is dedicated to promoting inclusive and sustainable development through trade and investment. With a diverse membership, it empowers countries to harness trade for prosperity. [IDN-InDepthNews]
Image credit: UNCTAD
