(www.MaritimeCyprus.com) Global trade reached an all-time high of $33 trillion in 2024, marking a 3.7% increase—or $1.2 trillion—according to the latest Global Trade Update from UN Trade and Development (UNCTAD). However, the report also cautions that despite the strong performance, trade prospects for 2025 remain uncertain.
UNCTAD notes that the surge was largely driven by the services sector, which grew by 9% over the year and accounted for $700 billion—almost 60% of the overall growth. Trade in goods also expanded, rising by 2% and adding $500 billion. While most regions experienced positive trade growth, Europe and Central Asia saw declines. Growth trends varied across industries: sectors like agri-food, communication technology, and transport performed well, whereas energy, apparel, and extractive industries faced slowdowns due to softer demand and shifting policies.
Services drove growth, rising 9% for the year and adding $700 billion – nearly 60% of the total growth. Trade in goods grew 2%, contributing $500 billion.
Most regions saw positive growth, except for Europe and Central Asia. Growth varied by industry – agri-food, communication technology and transport saw gains, while energy, apparel and extractives slowed due to weaker demand and policy shifts.
However, momentum slowed in the second half of the year. In the fourth quarter, trade in goods grew by less than 0.5%, and services edged up just 1%.
Trade inflation neared zero as prices for traded goods stabilized in the last quarter of 2024. The lingering effects of high post-pandemic inflation appear to have run their course.
In 2024, developing economies outpaced developed nations, with imports and exports rising 4% for the year and 2% in the fourth quarter, driven mainly by East and South Asia. South-South trade expanded 5% annually and 4% in the last quarter.
Chain and India outperformed global trade averages. In contrast, trade in the Russian Federation, South Africa, and Brazil remained sluggish for most of the year, with some improvement in the fourth quarter.
Meanwhile, developed economies’ trade stagnated, with imports and exports flat for the year and down 2% in the last quarter.
Merchandise trade imbalances widened
The US trade deficit with China reached -$355 billion, widening by $14 billion in the fourth quarter, while its deficit with the European Union (EU) increased by $12 billion to -$241 billion.
Meanwhile, China’s strong exports pushed its trade surplus to the highest level since 2022. The EU reversed previous deficits and posted a trade surplus for the year.
Trade growth holds at outset of 2025, but uncertainty looms
Trade has remained stable in early 2025, but mounting geoeconomic tensions, protectionist policies and trade disputes signal likely disruptions ahead.
Falling shipping indexes signal weaker demand for manufactured goods, inputs and commodities as businesses adjust to increasing uncertainty.
The challenge in 2025 is to prevent global fragmentation – where nations form isolated trade blocs – while managing policy shifts without undermining long-term growth.
For more in-depth details, click below to download the UNCTAD Global Trade Update (March 2025):
Source: United Nations Conference on Trade and Development (UNCTAD)
