Global trade resumes growth in first quarter of 2024

02 July 2024

The growth was fueled by positive trade dynamics for the United States and developing countries, and in sectors related to green energy and artificial intelligence.

Trade in artificial intelligence-related equipment surged in first quarter of 2024
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© Shutterstock/Gorodenkoff | Trade in artificial intelligence-related equipment, such as high-performance servers, surged in the first three months of 2024.

Global trade trends turned positive in the first quarter of 2024, with the value of trade in goods increasing by around 1% quarter-over-quarter and services by about 1.5%.

According to the latest Global Trade Update released by UN Trade and Development (UNCTAD) on 2 July, the growth was primarily driven by increased exports from China (9%), India (7%) and the US (3%).

Conversely, Europe’s exports showed no growth and Africa’s decreased by 5%.

The report expects the increase to add approximately $250 billion to trade in goods, and $100 billion to services trade, in the first half of 2024 compared to the second half of 2023.

The short-term trade outlook is cautiously optimistic as the global forecasts for GDP growth remain at around 3% for 2024.

The report says that if positive trends persist, global trade in 2024 could reach almost $32 trillion, but unlikely to surpass the record level seen in 2022.

South-South trade sets the pace

Trade in developing countries and South-South trade increased by about 2% in both imports and exports during the first quarter of 2024.

In comparison, developed countries saw flat imports and a modest 1% rise in exports.

South-South trade rose by 2% in the first quarter of 2024. However, its value is still significantly below the levels of 2022, as its four-quarter moving average remains negative at -5%.

Green energy and artificial intelligence sectors see strong surge

The report highlights that trade growth varied significantly across sectors, with green energy and artificial intelligence-related products experiencing stronger increases.

The trade value of high-performance servers rose by 25% compared to the first quarter of 2023, while other computers and storage units saw an 8% increase.

The trade value of electric vehicles also grew by about 25% between 2022 and 2023.

Positive outlook tempered by geopolitical and policy challenges

Despite these positive trends, the outlook for 2024 is tempered by potential geopolitical issues and industrial policy impacts.

The report says that geopolitical tensions, rising shipping costs, and emerging industrial policies could reshape global trade patterns.

Since late 2022, there has been an uptick in the political proximity of trade – for instance so-called “friend-shoring” – favouring countries with similar geopolitical stances.

Although this trend has begun to soften, the report warns that an increasing focus on domestic industries and trade restrictions could hinder international trade growth.