Global Merchandise Trade Faces Contraction

The World Trade Organization (WTO) has adjusted its outlook for global merchandise trade in 2025, predicting a 0.2% contraction, a significant downgrade from the previously anticipated 3% growth. This downturn is expected to be spearheaded by North America, with exports projected to plummet by 12.6%.

Potential for Further Decline

Highlighting the fragility of the current trade environment, the WTO cautioned that an escalation in trade wars and increased policy uncertainty could exacerbate the situation, potentially leading to a 1.5% decline in global goods trade. On a slightly brighter note, the trade in services is anticipated to grow by 4%, albeit this is still a reduction of about 1 percentage point from earlier forecasts.

Director-General's Warning

"While the recent de-escalation in tariff tensions has provided temporary relief, the persistent uncertainty poses a significant threat to global growth. The most vulnerable economies stand to bear the brunt of these adverse effects," stated WTO Director-General Ngozi Okonjo-Iweala, underscoring the precarious balance of the global trade ecosystem.