The United Nations Conference on Trade and Development (UNCTAD) has projected that total global trade in 2025 would surpass $35 trillion. The body also said that global trade expansion is projected to slow in 2026, pressured by softer global economic growth, heightened geopolitical tensions, rising trade-related costs and continued policy uncertainty affecting cross-border activity.

These findings are contained in the December 2025 Global Trade Update released by UNCTAD. According to the report, the 2025 projection of $35 trillion represents an increase of about $2.2 trillion or seven per cent when compared to the same period in 2024.

Besides, the report points to weakening growth in major economies, deepening geopolitical fragmentation, and ongoing structural weaknesses in the global trading system as key factors expected to restrain trade momentum in 2026.

UNCTAD observed that while import demand in some consumption-led markets and sectors, especially digital services and green industries, may offer modest support, it is unlikely to counterbalance the overall deceleration.

The agency also highlighted that escalating trade frictions, alongside higher logistics, financing, and regulatory compliance costs, are likely to further limit trade flows.

In contrast, UNCTAD expressed greater optimism for developing regions, where trade sentiment remains largely positive. The report noted that many developing countries continue to pursue open trade policies and encourage cross-border investment, helping to foster stronger intra-regional trade and South–South exchanges.

According to UNCTAD, this dynamic could partially offset the effects of weaker demand from advanced economies. Despite the cautious medium-term outlook, UNCTAD underscored relatively strong performance in the near term.

It noted that trade growth stayed positive in Q3 2025, driven by developing economies, expanding South–South trade and solid results from Africa and East Asia.

The UNCTAD Nowcast for Q4 also points to ongoing growth. Overall, international trade in 2025 is expected to expand faster than global output in real terms, signalling renewed momentum in cross-border commerce.

The report shows that although global trade growth slowed in Q3 2025, it remained positive at around 2.5 per cent on a quarter-on-quarter basis.