Global trade could reach record-breaking USD 32 tn in 2022

Global trade is expected to reach a record-breaking result of USD 32 trillion this year, according to projections released this Tuesday (13) by the United Nations Conference on Trade and Development (UNCTAD). Trade in goods is estimated to total USD 25 trillion in 2022, up 10% from 2021, and global services trade to USD 7 trillion, up 15% in the same comparison.

The robust numbers are mainly due to the performance in the year’s first half, as trade was subdued in the second. Moreover, for 2022 Q4, the UNCTAD indicated a drop in goods and services in the report. The organization reported deteriorating economic conditions and increased uncertainties have resulted in a slowdown in the second half of 2022.

The report indicates the decline in the second half could be solely nominal, with an increase in volumes but a drop in the prices of primary products, especially energy. In contrast, prices of internationally traded intermediate inputs and consumer goods have continued to rise during the same period, raising concerns about inflation.

The UNCTAD stated the slowdown in trade could become more pronounced in 2023. The organization’s outlook is still uncertain, but some factors could impact results. Among them are economic growth forecasts being revised downwards for 2023 due to high energy prices, rising interest rates, persistent inflation, and the repercussions of the war in Ukraine.

For 2023, the organization also predicts high prices for energy, intermediate inputs, and consumer goods could slow down demand for imports. Due to increasing interest rates, countries’ concerns about the sustainability of their debts could also impact trade. Tightening financial conditions could also pressure indebted governments.

Global trade players, however, could also expect positive movements, such as improvements in logistics after adjustments to the pandemic in shipping, new ships entering service, and port congestion resolved. The UNCTAD predicts a downward trend in freight and cargo shipping rates, new trade agreements being signed, reformulated global supply chains with the diversification of suppliers, and a transition to a greener economy.

Source: ANBA

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