WTO Cuts Global Trade Growth Forecast to 0.5% for Next Year
The World Trade Organization (WTO) has significantly revised its forecast for global trade growth. The new prediction for merchandise trade volume growth in 2026 is set at just 0.5%. This marks a sharp decline from the previous estimate of 1.8% made in August 2024. The adjustment is largely attributed to the anticipated delayed repercussions of U.S. tariffs.
WTO’s Director-General Expresses Concerns
Director-General Ngozi Okonjo-Iweala conveyed her concerns during a media briefing in Geneva. She highlighted that the global trade outlook for 2026 appears “bleaker.” However, she also emphasized that the world trading system demonstrates resilience. The multilateral trading rules are providing a measure of stability amidst ongoing trade challenges.
Growth Expectations for 2025
For 2025, the WTO has raised its outlook for global trade growth to 2.4%, up from an earlier prediction of 0.9%. This increase is fueled by a surge in imports into the United States ahead of scheduled tariff hikes and a rise in trade involving AI-related goods. However, this growth remains below the 2.8% recorded in 2024.
Impact of U.S. Tariffs
Since taking office, U.S. tariffs have created uncertainty in the global market. On August 7, the Trump administration raised tariffs on imports from multiple countries, affecting significant trade partners like Switzerland, Brazil, and India. The European Union also adjusted its trade terms, imposing duties of 15% on various goods imported into the U.S.
Trade Volume Trends
- 2025 trade volume growth: 2.4%
- 2024 trade volume growth: 2.8%
- 2026 trade volume growth forecast: 0.5%
Despite the positive change for 2025, the overall growth trajectory for world merchandise trade is expected to slow down. For the first half of 2025, trade volume saw an increase of 4.9% year-on-year. The value of trade rose by 6%, overshadowing the 2% growth seen in 2024.
The Role of AI in Trade Growth
Surges in demand for AI-related products, including semiconductors and telecommunications equipment, significantly contributed to this growth. Trade in AI-linked goods accounted for nearly half of the overall increase, showing a year-on-year rise of 20%. Regions such as Asia and Africa are predicted to show the highest export volume growth this year, while North America’s growth is expected to decline.
Looking Ahead
As the WTO revises forecasts, the organization anticipates weaker import performance across all regions by 2026. While trade in goods may have flourished this year, the potential for a downturn looms in the coming year as tariff impacts become more pronounced.
