According to the UN Trade and Development Agency, UNCTADwhose analysts said global growth “turned negative” in the second half of 2022.
The UN agency said trade in goods and services is expected to reach $25 trillion and $7 trillion respectively by the end of the year.
That The downturn began in the third quarter of the yearwith trade in goods about one percent lower than from March to May.
UNCTAD calculations are based on national statistics.
The values go down
In its Global Trade Update, UNCTAD said that while these are in fact services elevated by 1.3 percent in the third quarter, both goods and services are likely to fall in value by the end of the year.
Demand for foreign goods ‘proved robust’ By 2022, according to the trade and development update, the total trading volume is expected to increase by three percent.
Trade volumes from East Asian economies have proved resilient, while South-South trade lagged in the third quarter.
In total, “Geopolitical tensions, persistent inflation and lower global demand are expected to negatively impact global trade in 2023said UNCTAD in its report highlights.
negative factors
Among the negative factors highlighted is the lower economic growth forecast until 2023 by high energy prices, rising interest rates, persistent inflation in many economies and the depressive effects of the war in Ukraine.
Component and consumer goods prices are likely to dampen import demand and lead to a decline in international trade volumes.
Record highs in global debt and rising interest rates,”raise significant concerns about debt sustainability’, increasing pressure on the most indebted governments and ‘amplifying vulnerabilities’.
positive factors
On the top, Ports and shipping companies have adapted to the supply chain crunch provoked by it COVID-19 Pandemic, with new ships coming into service and port congestion largely resolved, UNCTAD said.
Recently signed trade agreements such as the Regional Comprehensive Economic Partnership in the Asia-Pacific (RCEP) and the African Continental Free Trade Area (AfCFTA) “should come to fruition and bring some dynamism to the entire international system,” the report stresses.
Overall, risk and uncertainty remain high for global supply chains, but Efforts to create a greener global economy are expected to boost demand for environmentally sustainable products, UNCTAD said, while reducing demand for high-carbon goods, and for fossil fuels.
