The World Trade Organization (WTO) has significantly revised its forecast for global trade growth in goods for this year. This adjustment follows a strong performance in the first half of the year, driven by increased demand for artificial intelligence (AI)-related products and front-loaded U.S. imports due to tariff concerns.
WTO Increases Trade Growth Forecast
The WTO now expects merchandise trade to grow by 2.4% in 2023, a notable increase from the 0.9% forecast made in August. Earlier in April, experts even predicted a decline of 0.2% for the year.
Predictions for Future Years
- The 2026 growth forecast has been revised downwards to 0.5% from 1.8%.
- Growth for exports in services is projected at 4.6% in 2025 and 4.4% in 2024.
Key Drivers of Trade Growth
The surge in trade is largely attributed to strong performance in AI-related goods. Items like semiconductors, servers, and telecommunications equipment have notably contributed to this uptick. WTO Director-General Ngozi Okonjo-Iweala pointed to several factors supporting this trade resilience, despite facing significant challenges.
- Measured responses to changes in tariffs, especially those imposed during the Trump administration, helped maintain trade flow.
- Increased trade among developing nations is also playing a crucial role in stabilizing the market.
- Front-loading of import orders by U.S. companies ahead of potential tariff hikes has led to record inventory levels.
Surge in U.S. Imports
U.S. imports have seen a dramatic annual increase of 13.2%, primarily driven by pharmaceuticals and precious metals like gold. This trend aligns with the observed “soaring demand” for AI-related goods, which significantly boosts capital investment.
Impact of AI on Global Trade
AI-related products now account for an impressive 42% of all global trade growth, far exceeding their 15% share in total world trade. Developing countries are also benefiting, showing an 8% year-on-year increase in trade activities. This growth includes trade with partners other than China, which has risen by approximately 9%.
In summary, the WTO’s updated forecasts reflect a dynamic adjustment in global trade, influenced heavily by technological advancements and strategic economic decisions made by nations worldwide. This demonstrates the ongoing evolution of trade in a rapidly changing economic landscape.
