The World Trade Organization expects a gradual recovery in trade in 2024 and 2025

He added: “The impact may be particularly severe on the countries directly concerned, but it may also indirectly affect the global cost of energy and shipping methods.”

Global trade in goods fell by 1.1% in 2023, affected by higher inflation and higher interest rates.

In its updated global data forecast, the World Trade Organization revised its forecast for global merchandise trade growth in 2024 to 2.7%, up slightly from April's forecast of 2.6%.

He added that demand for goods was higher than expected in Asia and lower than expected in Europe.

The World Trade Organization lowered its forecast for 2025 from 3.3% to 3.0%.

Ralph Osa, chief economist at the World Trade Organization, told AFP that while there were “risks everywhere” for international trade, “the biggest risk would be geopolitical risks” from the conflict in the Middle East.

“For example, if oil prices rise radically, that will definitely affect the economy and trade,” he said.

However, “markets currently cannot seem to decide whether they should worry about supply risks from the Middle East, or what they should think about demand from China.”

Germany's weak point

Asian exports this year are expected to grow by up to 7.4%, driven by China, Singapore and South Korea, while Japanese exports are stagnant.

On the demand side, Chinese import growth remains moderate, with stronger growth in other Asian economies such as Singapore and Malaysia.

Meanwhile, Europe expects a 1.4% decline in the volume of its exports in 2024. Imports expect a 2.3% decline.

“We see Europe weaker than expected and Asia stronger than expected,” Osa said.

He added that for Europe, most of the burden comes from Germany.

Osa pointed to the decline in German exports of compounds and chemicals, especially organic chemicals.

The German manufacturing sector has been hit by rising energy costs following the Russian invasion of Ukraine and falling external demand, which has exacerbated its decline.

Mexico and Vietnam “Mosul”

The WTO forecasts highlighted the growing importance of so-called “link countries” in global supply chains and trade, especially Mexico and Vietnam, followed by India.

Osa explained that these countries have become a route linking exports at a time when trade relations between China and the United States were “really suffering.”