Global trade growth is sluggish, and trade restrictions pose a risk

Is global trade falling into a new trough?

In response, the World Trade Organization (WTO), the World Bank (hereinafter referred to as "the Bank") and the International Monetary Fund (IMF) have all made recent assessments.

The WTO has not yet updated its forecast. However, WTO Director-General Roberto Azevêdo recently stated that the volume of goods trade in 2023 may be lower than the 0.8% growth rate predicted by the organization in October 2023, and the WTO's forecast of 3.3% global trade growth in 2024 may be overly optimistic.

In a recent article titled "Global Trade Nearly at a Trough, Populism Seriously Impacting Economic Growth", Gao Si, the World Bank's Deputy Chief Economist and Director of the Prospects Group, and others also proposed that international trade has now almost come to a halt, and it is set to remain sluggish in the coming years.

"Trade in goods and services grew at the slowest rate in 2023, estimated at just 0.2%, the slowest pace in five decades outside of a global economic downturn. Had it not been for the growth in services trade, the growth rate would have declined entirely. Trade in goods shrank by about 2%, the most severe contraction this century outside of a global economic downturn," wrote Goss and others. "Trade growth will improve this year, but it will still only reach half of the average level of the decade before the pandemic. In fact, by the end of 2024, global trade will have experienced its slowest five-year growth since the 1990s."

Regarding the current slow growth in trade, major international institutions have pointed to similar causes: a decrease in new trade agreements, an increase in trade restrictions, disruptions caused by the Red Sea crisis, and reduced external demand due to inflation.