The World Trade Organization (WTO) has forecasted a rebound in global trade for the year 2024, with an anticipated growth rate of 2.6%.
Despite this positive outlook, the WTO has revised down its previous estimate, originally pegged at 3.3% in October last year, citing lingering effects from factors that contributed to the contraction experienced in 2023.
The global economy faced significant challenges in 2023, resulting in a contraction in cross-border shipments. High energy prices and inflationary pressures dampened demand for manufactured goods, leading to a decline in world merchandise trade volumes by 1.2%. This downturn in demand also affected India's exports, which saw a decrease of 4.8% to $431.4 billion, as reported by the commerce ministry.
However, the WTO's World Trade Outlook suggests that the tide may be turning in 2024, with consumption demand expected to pick up in advanced economies. The organization predicts that inflationary pressures will ease, allowing real incomes to rise, particularly in advanced economies. This, in turn, is anticipated to boost the consumption of manufactured goods throughout the year.
The report highlights a recovery in demand for tradable goods, with indices of new export orders indicating improved trade conditions at the beginning of the year. Looking ahead to 2025, the WTO forecasts a growth rate of 3.3%, with Asia projected to play a significant role in driving trade volume growth in both 2024 and 2025.
In 2023, import demand experienced a sharp decline in Europe, decreased in North America, remained steady in Asia, and increased in major fuel-exporting economies. Despite the challenges faced by the global economy, world trade in terms of value fell by 5% to $24.01 trillion in 2023.
This decline was partially offset by a robust increase in commercial services trade, which saw a notable rise of 9% to $7.54 trillion.
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