Global Trade Set for Record High This Year, But Growth Momentum Slowing

## Global Trade Surges to New Heights

Global trade is projected to surpass a remarkable $35 trillion this year, marking a 7% increase from last year, according to the UN Trade and Development organization (Unctad) in their year-end “Global Trade Update.”

### Sustained Growth Amid Challenges

This new report highlights that trade has continued to grow throughout the latter half of this year. Despite geopolitical tensions, escalating costs, and inconsistent global demand, the momentum for trade remained relatively strong.

### Quarterly Insights

From July to September, global trade saw a growth rate of 2.5% compared to the previous quarter. The trade in goods increased by nearly 2%, while services enjoyed a robust growth of 4%.

As we move towards the year’s end, growth is expected to continue, albeit at a slower rate: 0.5% for goods and 2% for services.

### Projections for Trade Value

If current forecasts hold, goods are anticipated to contribute around $1.5 trillion, while services could add approximately $750 billion, aligning with an overall 7% growth for the entire year.

### Price Dynamics in Trade

A significant shift in pricing patterns is noted, as trade values that once rose due to increased prices are now likely to decline. The final quarter of 2025 is expected to show growth driven by actual volumes shipped rather than price hikes, suggesting stable demand even as inflation begins to ease.

### Highlights from Regions

East Asia, along with Africa and South-South trade, led the gains in global trade. East Asia, in particular, witnessed the highest export growth of 9% over the past year, supported by a remarkable 10% surge in intra-regional trade.

Africa also exhibited robust performance, with imports climbing by 10% and exports increasing by 6%. South-South trade expanded by about 8%, demonstrating stronger economic ties among developing nations.

### Growth Leaders

China and the Republic of Korea were standout performers in East Asia, while Brazil and South Africa were essential drivers in South America and Africa. Notably, India and China saw significant growth in services exports, highlighting the rising influence of emerging economies in the global trade landscape.

### Sector Performance

In the manufacturing sector, growth reached 10% for the year, spurred on by a 14% rise in electronics, propelled by demand related to AI technologies. Agriculture also experienced substantial growth, particularly in cereals and fruits and vegetables, each increasing by 11%.

Conversely, automotive trade saw a decline of 4%, alongside reductions in fossil fuel trade due to falling prices.

### Future Trade Insights

Looking ahead, Unctad notes that trade in 2025 is consistently outpacing global economic growth, effectively reversing the stagnation seen between 2023 and 2024. However, there are still significant imbalances, with trends like friendshoring and nearshoring reshaping trade patterns by shifting operations towards politically aligned or geographically closer partners.

### Anticipated Challenges Ahead

For 2026, Unctad forecasts weaker growth influenced by slower global activity, rising debts, increased trade costs, and ongoing uncertainties, which may impact overall trade performance.

What are your thoughts on the current state of global trade?