UNCTAD: Global Trade Experiences Drastic Decline

Shanieka Smith

Staff Writer

December 16, 2022 – Due to peaked inflation in the second half of this year, global trade has seen a drastic decline. As such, UN Trade and Development Agency (UNCTAD) predicted that trade in goods will reach $25 trillion and $7 trillion in services by the end of 2022.

The negative turn resulted from a 1 per cent decrease in goods trading in the third quarter when compared to the March-May period.  UNCTAD said both goods and services will fall in value by end of the year.

“Geopolitical frictions, persisting inflation, and lower global demand are expected to negatively affect global trade during 2023”, the UNCTAD said in their global trade update. It added that lower economic growth rates as a result of high fuel prices and increased interest rates will cause damage to several economies particularly those in great debt.

On the other hand, UNCTAD reported that since the onset of the COVID-19 pandemic, many ports and shipping companies have increased their number of ships and port congestion has been mostly resolved.  Recent trade agreements including the African Continental Free Trade Area (AfCFTA) will also be favourable to the global trade market.

The UNCTAD said there is still risk and uncertainty where global chain supply is concerned, but the demand for environmentally sustainable products will increase as a greener global economy is developed.