New risks loom as trade landscape shifts
Global trade started this year on stable ground, but challenges are mounting and the latest Global Trade Update by United Nations Trade and Development (Unctad), which covers data through to early March, signals a shifting landscape.
Shipping trends indicate a slowdown, with falling freight indices signalling weaker industrial activity, particularly in supply-chain- dependent sectors, the trade agency said.
World trade saw record expansion to $33-trillion in 2024, up 3.7% on 2023, driven by developing economies and strong services trade.
But new risks loom ahead, including trade imbalances, evolving policies and geopolitical tensions, says Unctad.
Supply chains are diversifying, not consolidating. Nearshoring and friendshoring trends reversed in 2024, as businesses moved beyond limiting trade to geopolitical allies or nearby regions.
Instead of consolidating supply chains, firms are now diversifying trade networks across multiple regions to reduce risk, thereby creating opportunities but adding complexity, it notes.
South-South trade is holding up, but Africa’s intra-regional trade is shrinking, reversing gains. Trade between Europe and Central Asia has declined, reflecting shifting demand.
Asia and Latin America remain key trade drivers, but growth has slowed in many advanced economies. The gap between developing and advanced economies is widening, it says.
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