Apart from improving macroeconomic conditions, rising demand for environmental goods should boost trade but significant uncertainties still remain.
The global trade in merchandise goods declined 5% on year in 2023 but the current year looks positive on the back of moderating inflation and increased growth forecasts, according to a report by the United Nations Conference on Trade and Development (UNCTAD).
Apart from improving macroeconomic conditions, rising demand for environmental goods should boost trade but significant uncertainties still remain.
Persistent geopolitical tensions, rising shipping costs, and high levels of debt weighing on economic activity in many
countries may still exert negative influences on global trade.
Despite the uncertainties, UNCTAD foresees a small but positive increase both in goods and services trade in January-March quarter.
Overall, the Global Trade Update of UNCTAD projects that global trade in 2023 will amount to approximately $ 31 trillion, contracting by close to $ 1 trillion (or 3%) compared to the record high of 2022.
Trade in goods is expected to contract by about $ 1.3 trillion in 2023, or 5 %, while services trade is expected to gain about $ 500 billion, or 8 %.
The volumes of trade growth stayed modestly positive throughout 2023. The slightly positive trend in the volume of
international trade suggests a resilient global demand for imported products, the report said.
Geoeconomic issues continue to play a significant role in shaping key bilateral trade trends. These factors not only impact
trade between the major global economies but also indirectly influence their trade dynamics with other trading partners.
According to the report , India’s dependence on China and the European Union increased by 1.2% while dependence on Saudi Arabia decreased by 0.6% in 2023.
Source:financialexpress.com