GLOBAL TRADE UPDATE OF UNCTAD (Syllabus: GS Paper 3 – Economy)

Context: Global trade rebounded in the first quarter of 2024 after a contraction in 2023, with the UN Trade and Development (UNCTAD) reporting a sequential increase of about 1% in goods and 1.5% in services.

United Nations Conference on Trade and Development (UNCTAD) 

• About: UNCTAD is a permanent intergovernmental body established by the United Nations General Assembly.
• Objective: Its objective is to assist developing countries, especially the least developed countries, and countries with economies in transition, to integrate beneficially into the global economy.
• Focus: on four main areas: trade and development, investment and enterprise, technology and innovation, and macroeconomics and development policies.
• Founded in: 1964. 
• Headquarter: Located in Geneva, Switzerland. 
  

  Key Highlights of Global Trade Update

  • Positive Trade Surge Expected: The UNCTAD forecasts a substantial increase in global goods and services trade for the first half of 2024, driven by favorable trade dynamics, particularly in large Asian developing economies.
  • Global Economic Outlook: Despite a stable global GDP growth projection of around 3% for 2024, the short-term outlook for international trade remains cautiously optimistic, with potential trade volume nearing $32 trillion.
  • Geopolitical Concerns Impacting Trade: Geopolitical events such as Houthi attacks in the Red Sea, the Russia-Ukraine conflict, US-China trade tensions, and EU regulatory measures have significantly influenced global trade performance in 2024.
  • Sectoral Performance

  oGoods and Services Trade: Services sector resilient with an 8% increase; goods trade saw a 5% decline compared to 2022.

  oSector-Specific Growth: Green energy and AI-related products showed robust growth trends.

  • Export-Import Dynamics: Varied performance among major economies; notable improvements in exports for China, India, and the US; contrasting declines for Japan and South Africa.