UNCTAD optimistic about global trade outlook in 2024
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
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New Delhi: Moderating global inflation and improving economic growth forecasts an optimistic outlook for world trade in 2024, says the United Nations Conference on Trade and Development (UNCTAD). The decline in the value of global trade throughout 2023 was primarily driven by reduced demand in developed nations and trade weaknesses within East Asia and Latin American regions, UNCTAD said in its 'Global Trade Update'. Lower commodity prices further contributed to lowering the value of international trade in 2023. In contrast, trade in services saw growth for most of 2023.
An uptick in global trade will help India to increase its exports in 2024. "Projections for 2024 are more optimistic," the report said, citing moderating global inflation and improving economic growth forecasts which indicate a reversal of the downward trends. Additionally, rising demand for environmental goods should boost trade in 2024. "However, it's important to note that the global trade outlook for 2024 remains subject to significant uncertainties," UNCTAD said.
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, it added. UNCTAD noted that global forecasts for GDP growth remain at around 3 per cent for 2024, but these still fall below historical averages. Furthermore, substantial disparities persist among countries and regions in terms of their anticipated economic outlook for the upcoming year. "Such disparities will influence patterns of trade," it said. Strong demand for both container shipping and raw materials, commodity prices volatility, lengthening of supply chains, increase in subsidies and trade restrictive measures, and shipping routes disruptions, are some of the most relevant factors influencing global trade in 2024, it said.
On India, the report said its goods imports increased by 3 per cent and exports were up 5 per cent in the fourth quarter of 2023. However, both imports as well as exports declined in 2023. UNCTAD further said the decline in global trade has been more pronounced for developing countries. During 2023, imports and exports of developing countries declined by an average of 5 and 7 per cent, respectively. Conversely, trade for developed countries decreased by about 4 per cent for imports and 3 per cent for exports.
