WORLD TRADE OUTLOOK -
REPORTS AND INDICES
News: Global trade to pickup in
2024: WTO
What's in the news?
●
Global goods trade is expected to pick up gradually this year following a
contraction in 2023, the World Trade
Organization (WTO) said in a forecast.
Key takeaways:
●
The volume of world merchandise trade should increase by 2.6% in 2024 and 3.3% in
2025 after falling 1.2% in 2023, it said but cautioned that regional conflicts, geopolitical tensions and economic
policy uncertainty pose substantial downside risks to the forecast.
Key Highlights of WTO
Global Trade Outlook and Statistics Report: World
1. Merchandise Trade
Volume:
●
It is projected to grow 2.6% in 2024 and 3.3% in
2025, following a larger-than-expected decline of -1.2% in 2023.
●
By the end of 2023, merchandise trade volume was up
6.3% compared to 2019. Commercial services also increased, with annual US$
values up 21% between 2019 and 2023.
●
India’s share of global goods exports was 1.8% in 2023 and imports was
2.8%.
2. World Real GDP Growth
at Market Exchange Rates:
●
It is slowed from 3.1% in 2022 to 2.7% in 2023 but
is expected to remain mostly stable over the next two years at 2.6% in 2024 and
2.7% in 2025.
3. Linked to
Inflationary Pressures:
●
The contrast between the steady growth of GDP and
the slowdown in merchandise trade volume is linked to inflationary pressures,
which had a downward effect on consumption of trade-intensive goods.
4. US Dollar Value of
Merchandise Counterbalanced by Commercial Services Trade:
●
The US dollar value of global merchandise trade
dropped by 5% to US$ 24.01 trillion. However, this decline was largely
counterbalanced by a robust 9% increase in commercial services trade, reaching
US$ 7.54 trillion.
●
In global commercial services, India’s share in
exports is seen 4.4% in 2023 at $344 billion, up 11% on-year whereas imports is
seen as 3.4% at flat at $247 billion.
5. Reasons Behind the
Shift:
●
The decrease in merchandise exports can be
attributed in part to the declining
prices of commodities like oil and gas.
●
Conversely, the upsurge in commercial services
trade was fueled by the resurgence of international travel and the booming
market for digitally delivered services.
6. Digitally Delivered
Services:
●
India is now
4th largest exporter of Digitally Delivered Services (India’s share rose to
6% in 2023 from 4.4% in 2019) and reached $257 billion in 2023 in the World,
marking a 17% increase compared to the previous year.
●
This growth outpaced that of Germany and China,
which saw 4% growth each.
7. Future Outlook:
●
In 2024 and 2025, inflation is expected to
gradually abate, allowing real incomes
to grow again in advanced economies, boosting consumption of manufactured
goods.
●
A recovery of demand for tradable goods in 2024 is
already evident. This is related to an increase in household consumption linked
to improved income prospects.
8. Potential Challenges:
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Risks to the forecast are on the downside due to current geopolitical tensions and policy
uncertainty.
●
Conflict in the Middle East has diverted sea
shipments between Europe and Asia while tensions elsewhere could lead to trade
fragmentation.
●
Rising protectionism is another risk that could
undermine the recovery of trade in 2024 and 2025.
Further Reference - WTO