A recent report by the United Nations Conference on Trade and Development (UNCTAD) indicates that global merchandise trade declined by 5% in 2023, with some positive outlook for the current year due to lower inflation and growth forecasts.
The rising demand for environmental goods is expected to boost trade, but uncertainties like geopolitical tensions, high shipping costs, and economic debt in many countries may still affect global trade negatively.
Despite these challenges, UNCTAD predicts a small but positive increase in both goods and services trade in the first quarter of 2023. The report projects that global trade in 2023 will reach around $31 trillion, decreasing by close to $1 trillion compared to the peak in 2022.
While goods trade is anticipated to contract by around $1.3 trillion, services trade is expected to grow by approximately $500 billion. The report also notes that trade growth remained modestly positive throughout 2023, indicating a steady global demand for imported goods.
Geoeconomic factors continue to impact bilateral trade patterns, influencing trade dynamics between major economies and their trading partners. In 2023, India’s reliance on China and the European Union increased by 1.2%, while dependence on Saudi Arabia decreased by 0.6%.
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