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The outlook for world trade remains resilient despite tariff increases but growth is expected to slow next year. The WTO forecasts a rise in world merchandise trade volume growth for 2025, followed by a decline in 2026. World merchandise trade volume growth is projected at 2.4% for 2025, up from 0.9% in August. The forecast for 2026 has been downgraded to 0.5%, down from 1.8%. Services trade is expected to grow by 4.6% in 2025 and 4.4% in 2026. The first half of 2025 saw a 4.9% year-on-year increase in merchandise trade volume. Factors contributing to trade growth include frontloading of imports in North America, favorable macroeconomic conditions, and increased demand for AI-related goods. Trade growth is expected to slow in 2026 due to higher tariffs and reduced consumer confidence.
Several trade-related indicators contribute to the WTO’s forecast. Global container throughput rose by 6.0% year-on-year in the first half of 2025, indicating robust trade activity. Purchasing Managers' Indices showed a decline in new export orders, signaling potential contraction in future trade. The manufacturing and services indices of major economies showed varied performance from January to August 2025, with notable declines in most countries except Italy and some growth in services in the UK and India. Manufacturing indices decreased in most economies: Canada (50.3 to 44.8), UK (45.8 to 41.8), Japan (49.7 to 44.7). The US and China experienced slight declines in manufacturing indices. Services trade is forecast to grow by 4.6% in volume terms in 2025 and by 4.4% in 2026, though this represents a slowdown from historical trends. The UK and India saw increases in services trade volume, while Japan's index dropped from 52.1 to 46.0 and Canada’s from 43.9 to 38.6. Ireland's services index remained in expansion at 51.6, and China's services index increased slightly from 51.2 to 51.5.
Looking at trade in value terms, world merchandise trade value increased by 6% year-on-year in the first half of 2025. The office and telecom equipment sector grew by 18%, chemicals by 10%, and other machinery by 9%. Fuels and mining products saw a decline of 5%, with fuels down by 11%. Africa experienced the highest growth in merchandise imports and exports, particularly in commodity products. Major exporting economies like Hong Kong (13.3% growth) and Japan (6.4% growth) contributed significantly to overall trade growth. AI-related goods emerged as a significant driver of global trade growth in early 2025, with trade in these products expanding by over 20% year-on-year. Non-AI goods trade grew by less than 4%, indicating a stark contrast in growth rates. AI-related products accounted for 15% of global trade but contributed nearly half of overall trade growth. The US was a key player, with stable growth in imports of semiconductors and servers. Global services trade growth slowed to 5% year-on-year in early 2025, with a notable recovery in the second quarter. The US dollar's appreciation and economic uncertainty contributed to the slowdown. Services exports in Europe and North America increased by only 3%, while Asia saw a strong growth of 9%. In the second quarter, services trade strengthened to 9%, aided by a weaker US dollar.
The outlook for global trade in 2025 has improved since the April edition of the GTOS with merchandise trade growth forecasted at 2.4%. The previous forecast was -0.2% in April and 0.9% in August. The prediction for 2026 has worsened to 0.5% from 2.5% in April. The delay in the impact of US tariff increases is attributed to frontloading of purchases. Overall, the combined outlook for 2025 and 2026 shows a higher growth rate of 2.9% compared to earlier estimates.