WTO Upgrades 2025 Global Trade Growth Forecast
(MENAFN) The World Trade Organization (WTO) on Tuesday significantly upgraded its forecast for global merchandise trade growth in 2025 to 2.4 percent, a major jump from its earlier 0.9 percent prediction made in August. However, the outlook for 2026 was downgraded sharply to 0.5 percent from the previous 1.8 percent estimate, according to the WTO’s latest Global Trade Outlook and Statistics report.
The report projects global GDP growth at 2.7 percent in 2025 and 2.6 percent in 2026. It also revealed that the volume of world merchandise trade, calculated as the average of exports and imports, grew 4.9 percent year-on-year in the first half of 2025.
The WTO attributed this robust trade expansion to multiple factors, including advance import shipments in North America anticipating increased U.S. tariffs, easing inflation alongside supportive fiscal measures, strong emerging market performance, and a boom in trade related to artificial intelligence (AI) products.
Trade activity among developing countries notably accelerated, with South-South trade rising 8 percent year-on-year in the first half of 2025—outpacing the 6 percent growth in total global trade value. AI-related products such as semiconductors, servers, and telecommunications equipment drove nearly half of this trade growth, with their trade value surging 20 percent year-on-year.
Speaking to the press, WTO Director-General Ngozi Okonjo-Iweala highlighted the trade sector’s ability to withstand significant challenges, noting that despite strong headwinds from unilateral U.S. actions and a sharp increase in trade policy uncertainty, global trade has remained resilient. She emphasized that this durability demonstrates there is a functioning core within the multilateral trading system that continues to operate effectively.
However, the report warned of significant downside risks, chiefly the spread of trade-restrictive measures and mounting policy uncertainty across more countries and sectors. It highlighted concerns that rising import prices and slower shipping could fuel inflation later this year, especially as inventories dwindle in tariff-affected industries.
Regionally, trade performance varied sharply: Asia and Africa are expected to lead export growth in 2025, while Europe faces slower gains, and North America anticipates declining exports. The report also forecast a slowdown in services export growth—from 6.8 percent in 2024 to 4.6 percent in 2025, and further to 4.4 percent in 2026—despite their indirect tariff exposure.
Europe is projected to spearhead services export growth in 2025, followed by Asia, the Middle East, and the Commonwealth of Independent States (CIS), the report concluded.
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