Decline in Merchandise Trade: Global merchandise trade is projected to decline by 0.2% in 2025, a sharp contrast from the 2.9% growth in 2024, due to trade tensions.
tariffs could cut global trade growth by 0.6%, and US-China tariff escalation could reduce trade by another 0.8%.
Modest Services Growth: Global services trade is projected to grow by 4.0% in 2025, slower than expected due to tariff-induced disruptions in goods trade.
Regional Disparities: North America is expected to face a 12.6% decline in exports. Asia and Europe are projected to see modest trade growth.
Vulnerable Economies: LDCs are particularly vulnerable to the downturn due to reliance on a narrow range of exports.
Trade Diversion: US-China trade disruption may cause trade diversion, increasing Chinese exports outside North America and creating opportunities for other suppliers to fill US import gaps.
UNCTAD forecasts global growth to slow to 2.3% in 2025, signaling a potential shift toward recession, especially for developing countries.
India’s Trade Position: India’s rank among merchandise exporters and importers has dropped, with a steady or slightly decreased share of global trade.
Call for Coordination: UNCTAD urges increased regional and international policy coordination to strengthen global economic resilience amidst rising economic fragmentation.
Policy Uncertainty: Uncertainty surrounding trade policy, especially the US-China stand-off, acts as a brake on global growth.
