On Monday, the United Nations Conference on Trade and Development (UNCTAD) announced in its Global Trade Update a forecasted reduction in global trade by 5% this year compared to the previous year, expressing a generally negative outlook for 2024.

The report estimates that this year’s global trade value will be around $30.7 trillion. It predicts a decrease in goods trade by about $2 trillion, or 8%, in 2023. However, trade in services is anticipated to grow by approximately $500 billion, an increase of 7%.

The UNCTAD report links the downturn in global trade to lower-than-expected export performance from developing nations. 

UNCTAD said, “Global trade has experienced a decline throughout 2023, primarily influenced by diminished demand in developed nations, underperformance in East Asia economies, and a decrease in commodity prices.”

“These factors collectively contributed to a notable contraction in the trade of goods.”

UNCTAD said the forecast for global trade in 2024 remained “highly uncertain and generally pessimistic.”

“While certain economic indicators hint at potential improvements, persistent geopolitical tensions, high levels of debt, and widespread economic fragility are anticipated to exert negative influences on global trade patterns,” it said.