New Delhi: Global merchandise trade growth in value terms is likely to decline by 1.2 per cent due to ongoing geopolitical uncertainties, economic think tank Global Trade Research Initiative (GTRI) said on Thursday.
It said the US dollar value of world merchandise trade fell 5 percent in 2023 to US$24.01 trillion, but the decline was mostly offset by strong growth in commercial services trade, which rose 9 percent to US$7.54 trillion.
This allowed world goods and commercial services exports to decline by 2 percent to US$30.8 trillion in 2023, on a balance-of-payments basis.
“Despite the World Trade Organization (WTO) expecting a 2.6 percent increase in trade volumes for 2024, the value of world merchandise trade is still seen to decline by 1.2 percent in 2024 compared to 2023, leading to a decline in trade value. The trend of falling behind trading volumes continues,” the think tank said.The WTO projects that world merchandise trade volume will grow by 2.3 percent in 2024 and 3.3 percent in 2025.
"The WTO forecast does not include the impact on trade values, a commonly used parameter to measure trade performance. Calculating trade value is straightforward, as it involves adding up the values of all transactions, However, calculating trade volumes is not as simple as simply adding up the quantities of different commodities like iron ore and diamonds, which can lead to false conclusions, said Ajay Srivastava, founder of GTRI.
He said the WTO uses a complex methodology to calculate changes in trade volumes.
He said that "probably" the WTO did not want to be the harbinger of bad news about a slowdown in merchandise trade.,
In 2023, merchandise exports totaled US$23.8 trillion, while imports stood at US$24.2 trillion. This shows a year-on-year decline of 4.5 percent in exports and 5.4 percent in imports.
For commercial services, exports grow to US$7.8 trillion and imports to US$7. trillion in 2023. Overall, total trade (both goods and services) declined slightly in 2023, with exports at USD 31.6 trillion (down 1.1 percent) and imports at USD 31.5 trillion (down 2.1 percent), compared to 2022.The decline in world merchandise trade was due to geopolitical tensions, the escalating protectionist war in Ukraine, Red Sea shipping disruptions, low primary commodity prices, and exchange rate fluctuations.
Furthermore, GTRI said India's merchandise export values in 2023 are expected to decline by 15 per cent compared to 2022, reflecting global trends.
However, overall export growth for the year was positive, thanks to a significant growth of 9.9 per cent in services exports, again in line with global trends.
In exports, India ranks 17th with 1.8 per cent share in world trade at US$432 billion, down 5 per cent from 2022.
India's rank improved from 18 in 2022 to 17 in 2023.In terms of imports, India ranked 8th with a share of 2.8 per cent valued at US$67 billion, showing a decline of 7 per cent over the previous year.
India's rank improved from 9 in 2022 to 8 in 2023.
It said, “GTRI projects a 1.2 percent decline in world merchandise trade values in 2024 compared to 2023."
It said the US dollar value of world merchandise trade fell 5 percent in 2023 to US$24.01 trillion, but the decline was mostly offset by strong growth in commercial services trade, which rose 9 percent to US$7.54 trillion.
This allowed world goods and commercial services exports to decline by 2 percent to US$30.8 trillion in 2023, on a balance-of-payments basis.
“Despite the World Trade Organization (WTO) expecting a 2.6 percent increase in trade volumes for 2024, the value of world merchandise trade is still seen to decline by 1.2 percent in 2024 compared to 2023, leading to a decline in trade value. The trend of falling behind trading volumes continues,” the think tank said.The WTO projects that world merchandise trade volume will grow by 2.3 percent in 2024 and 3.3 percent in 2025.
"The WTO forecast does not include the impact on trade values, a commonly used parameter to measure trade performance. Calculating trade value is straightforward, as it involves adding up the values of all transactions, However, calculating trade volumes is not as simple as simply adding up the quantities of different commodities like iron ore and diamonds, which can lead to false conclusions, said Ajay Srivastava, founder of GTRI.
He said the WTO uses a complex methodology to calculate changes in trade volumes.
He said that "probably" the WTO did not want to be the harbinger of bad news about a slowdown in merchandise trade.,
In 2023, merchandise exports totaled US$23.8 trillion, while imports stood at US$24.2 trillion. This shows a year-on-year decline of 4.5 percent in exports and 5.4 percent in imports.
For commercial services, exports grow to US$7.8 trillion and imports to US$7. trillion in 2023. Overall, total trade (both goods and services) declined slightly in 2023, with exports at USD 31.6 trillion (down 1.1 percent) and imports at USD 31.5 trillion (down 2.1 percent), compared to 2022.The decline in world merchandise trade was due to geopolitical tensions, the escalating protectionist war in Ukraine, Red Sea shipping disruptions, low primary commodity prices, and exchange rate fluctuations.
Furthermore, GTRI said India's merchandise export values in 2023 are expected to decline by 15 per cent compared to 2022, reflecting global trends.
However, overall export growth for the year was positive, thanks to a significant growth of 9.9 per cent in services exports, again in line with global trends.
In exports, India ranks 17th with 1.8 per cent share in world trade at US$432 billion, down 5 per cent from 2022.
India's rank improved from 18 in 2022 to 17 in 2023.In terms of imports, India ranked 8th with a share of 2.8 per cent valued at US$67 billion, showing a decline of 7 per cent over the previous year.
India's rank improved from 9 in 2022 to 8 in 2023.
It said, “GTRI projects a 1.2 percent decline in world merchandise trade values in 2024 compared to 2023."
