Global Trade Grow by $300 Bn in First Half, to Slow Down in Second Half
In Q1 2025, trade in goods and services grew at similar rates of approximately 1.5 and 1.7 per cent, respectively.
Chennai: Surge in imports by the US ahead of anticipated tariff increases may see global trade expand by around $300 billion in the first half of 2025, with goods contributing about $230 billion and services around $70 billion. However, India was among the few countries that saw both goods and services trade decrease in the March quarter. The second half may see slower growth, finds UNCTAD.
Global trade in goods and services continued its positive trajectory during the March quarter of 2025 with a quarterly increase of about 1.5 per cent and an annual growth rate of 3.5 per cent. In Q1 2025, trade in goods and services grew at similar rates of approximately 1.5 and 1.7 per cent, respectively.
However, services growth remains much higher on an annual basis, at around 9 per cent. The UNCTAD nowcast remains positive for the June quarter, indicating a QoQ growth of about 2 per cent in both goods and services. According to these estimates, global trade is set to expand by approximately US$300 billion in the first half of 2025, with goods contributing about US$230 billion and services around US$70 billion.
However, in Q1 2025, developed economies outpaced developing ones in trade growth—primarily due to a surge in imports by the United States ahead of anticipated tariff increases, and robust export activity from the European Union.
Exports contracted for India and the Republic of Korea. Goods imports by India fell 8 per cent on a quarterly basis and 6 per cent annually in the March quarter. Exports fell 4 per cent on a quarterly basis and remained flat on an annual basis.
Services trade showed mixed patterns among major economies in Q1 2025. Quarterly export growth was relatively strong for India and South Africa, while declines were recorded in China, Japan, and the European Union. On the import side, growth was more pronounced for Japan and South Africa, whereas India saw a sharp contraction in services imports.
India posted 9 per cent negative growth in services imports on a quarterly basis and 11 per cent growth annually. Services exports saw 2 per cent growth quarterly and 15 per cent growth annually.
Major deficit economies, including the US, India, Japan, and the UK recorded narrowing trade deficits during Q1 2025. Among surplus economies, China registered a large and expanding trade surplus.
Looking ahead to the second half of 2025, global economic growth is expected to slow down in many regions, suggesting that international trade may face slower growth. Moreover, the potential imposition of higher tariffs in the United States—and the risk of broader trade conflicts—pose significant downside risks.
