According to the latest Global Commerce Update, released on December 13 by UNCTAD, global trade could reach a record $32 trillion in 2022, but a slowdown that began in the second half of the year is projected to deepen in 2023 as geopolitical tensions and tight financial conditions remain.
Despite the conflict in Ukraine and the lingering effects of the virus, commerce in both products and services has increased significantly this year. Goods trade increased 10% year on year to an estimated $25 trillion, owing in part to increasing energy prices. Services increased 15% to a new high of $7 trillion. However, according to the UNCTAD assessment, the slowdown in the second half of this year portends worse circumstances in 2023.
“Economic growth forecasts for 2023 are being revised downwards due to high energy prices, rising interest rates, sustained inflation in many economies, and negative global economic spillovers from the war in Ukraine,” the report says.
“The ongoing tightening of financial conditions is expected to further heighten pressure on highly indebted governments, amplifying vulnerabilities and negatively affecting investments and international trade flows.”