Global Trade Shifts: Navigating Challenges and Opportunities in 2025

A UN report highlights significant trade expansion for developing nations like India and China in late 2024, but warns of potential global slowdown risks in 2025. Despite robust growth in services and goods trade, looming geoeconomic tensions, protectionist policies, and shipping declines could hinder international trade stability.

A United Nations report has revealed an impressive trade expansion for developing nations, notably India and China, in the fourth quarter of 2024. This growth, however, comes with a caveat: potential global economic slowdowns loom on the horizon, posing risks for the upcoming quarters.

According to the latest Global Trade Update by UN Trade and Development (UNCTAD), global trade surged by approximately $1.2 trillion in 2024, reaching an impressive $33 trillion. This uptick was driven by a 9% increase in services trade and a 2% uptick in goods trade, underscoring a favorable growth trend.

The report cautions that the stability of trade into 2025 is at risk due to mounting geopolitical tensions, protectionist measures, and a noticeable decline in shipping demand. Reduced demand for container shipping, as seen in the Shanghai Containerized Freight Index, indicates a decline in global economic activity, while challenges such as trade policy shifts and inflation sparks uncertainty about the future trajectory of international trade.

(With inputs from agencies.)