According to UNCTAD, trade in goods and services is expected to reach $25 trillion and $7 trillion respectively, by the end of the year.
Global trade is set to reach almost $32 trillion this year, but inflation has reversed some of the gains made in recent months.
This is the data released by the United Nations Conference on Trade and Development (UNCTAD).
According to UNCTAD, trade in goods and services in 2022 is expected to reach US$25 trillion and US$7 trillion, respectively. The decline began in the third quarter of 2022, with the value of goods traded down 1% compared to the period from March to May.
In its global trade update, UNCTAD said that although services actually increased by 1.3 percent in the third quarter, both goods and services are expected to fall in value in the run-up to the end of the year. Demand for foreign goods “proved resilient” through 2022, the trade and development update said, with trade volumes overall increasing by three percent.
Trade transactions in Asian economies grew well, but weakening momentum appeared in the third quarter of 2022 in the Southern Hemisphere. Overall, “geopolitical frictions, persisting inflation, and lower global demand are expected to negatively affect global trade during 2023”, said UNCTAD in its report highlights.
Forecast of five factors that will shape the world economy in 2023
The negative factors were also pointed out by UNCTAD. That is the forecast of a decline in economic growth until 2023 due to high energy prices, a tendency to increase interest rates while inflation in many economies persists, along with the consequences of the Ukraine conflict. Prices of consumer goods and inputs for production are forecast to weaken imports, leading to a decline in the value of international trade.
Besides, there are also many positive factors. Transport companies and seaports have cleared the supply chain deadlock caused by the COVID-19 pandemic. Many new ships have been put into operation, and the congestion at the port has been basically solved.
Some newly signed trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) or the African Continental Free Trade Area (AfCFTA) will bring results and create positive momentum for the international trading system.