Kolkata: Global trade has turned positive in the first quarter of 2024 with India, China and the US driving the global trade, according to the report released by UNCTAD, the UN trade and development body. Green energy and AI-related products have experienced a stronger increase in growth among all the trade sectors. The value of trade in goods in the first quarter of 2024 increased by around 1% quarter-over-quarter and services by about 1.5%.
This surge, fuelled by positive trade dynamics for the United States and developing countries, particularly large Asian developing economies, is expected to add approximately $250 billion to goods trade and $100 billion to services trade in the first half of 2024 compared to the second half of 2023.
Global forecasts for GDP growth remain at around 3% for 2024, with the short-term trade outlook being cautiously optimistic. If positive trends persist, global trade in 2024 could reach almost $32 trillion, yet it is unlikely to surpass its record level seen in 2022. China, India and the US have driven the trade growth. Global trade growth in the first quarter of 2024 was primarily driven by increased exports from China (9%), India (7%) and the US (3%). Conversely, Europe’s exports showed no growth and Africa’s exports decreased by 5%.
Trade in developing countries and South-South trade increased by about 2% in both imports and exports during the first quarter. In comparison, developed countries saw flat imports and a modest 1% rise in exports. On an annual basis, however, South-South trade fell by 5% when comparing the first quarter of 2023 to the first quarter of 2024.
The green energy and AI sectors have witnessed a significant surge. Trade growth varied significantly across sectors, with green energy and AI-related products experiencing stronger increases. The trade value of high-performance servers rose by 25% compared to the first quarter of 2023, while other computers and storage units saw an 8% increase. The trade value of electric vehicles also grew significantly, increasing by about 25%.
Despite these positive trends, the outlook for 2024 is tempered by potential geopolitical issues and industrial policy impacts. Geopolitical tensions, rising shipping costs, and emerging industrial policies could reshape global trade patterns. The report warns that an increasing focus on domestic industries and trade restrictions could hinder international trade growth.
UNCTAD is the UN trade and development body. It supports developing countries to access the benefits of a globalized economy more fairly and effectively and equips them to deal with the potential drawbacks of greater economic integration. It provides analysis, facilitates consensus-building and offers technical assistance to help developing countries use trade, investment, finance and technology as vehicles for inclusive and sustainable development.
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