Global Trade Outlook for 2023 bleak, says UNCTAD

* Trade within Africa increased by three per cent

The United Nations Conference for Trade and Development (UNCTAD) has stated that the outlook for global trade in 2023 is bleak.

UNCTAD, in a recent report obtained by The Guardian, said that after two consecutive quarters of decline, global trade in goods and services rebounded between January and March 2023, but prospects for the rest of the year are bleak.

The report, however, revealed that trade within Africa increased by three per cent, outperforming other intra-regional trade.

It stated that rising energy prices worldwide has heavily influenced global trade trends over the last 12 months.
During the first quarter of 2023, trade growth was positive for both goods and services, according to UNCTAD’s latest Global Trade update.

“Over the first three months of 2023, trade in goods went up by 1.9 per cent from the last quarter of 2022, adding about $100 billion. Global services trade also increased by about $50 billion, up by about 2.8 per cent compared to the previous quarter,” it stated.

For the second quarter of 2023, UNCTAD hinted of a slowdown in global trade growth, pointing to recently downgraded world economic forecasts and factors such as persistent inflation, financial vulnerabilities, the war in Ukraine and geopolitical tensions.

“Overall, the outlook for global trade in the second half of 2023 is pessimistic, as negative factors dominate the positive,” the report added.

It pointed out that “friend-shoring” has been on the rise since late 2022, characterised by a reorientation of bilateral trade flows to prioritise countries that share similar political values.

“The war in Ukraine, the decoupling of the United States-China trade interdependence, and the consequences of Brexit have played a significant role in shaping key bilateral trade trends during this period.

“Concurrently, there has been a decline in diversification of trade partners, implying that global trade has become more concentrated among major trade relationships,” the report noted.