Global Trade Surges 4.9 Percent in First Half of 2025, WTO Revises Growth Forecast Upward

The World Trade Organization (WTO) has raised its forecast for global merchandise trade growth in 2025 to 2.4 percent, up from the 0.9 percent projected in August. This adjustment follows stronger-than-expected trade performance in the first half of 2025, driven by increased spending on artificial intelligence-related products, a surge in North American imports ahead of tariff hikes, and robust trade with emerging markets.

WTO economists reported that the volume of global merchandise trade, measured by the average of exports and imports, grew by 4.9 percent year-on-year in the first half of 2025. The value of this trade, in current U.S. dollars, rose by 6 percent during the same period, compared to a 2 percent increase in 2024. Key factors behind this growth included favorable macroeconomic conditions such as disinflation, supportive fiscal policies, and strong performance in emerging markets. Anticipated import concentration in North America also played a significant role.

Sector reports and national statistics indicate that inventories increased in North America during the first half of the year, particularly in sectors like machinery, motor vehicles, lumber, construction equipment, and non-durable goods. Inventory-to-sales ratios rose as companies prepared for upcoming tariff changes.

Ngozi Okonjo-Iweala, WTO Director-General, commented that the measured response of countries to tariff changes, the growth potential of AI, and increased trade among emerging economies helped offset trade setbacks in 2025. She highlighted that South-South trade grew by 8 percent year-on-year in value terms in the first half of 2025, outpacing the overall global trade growth rate of 6 percent. Trade between emerging economies excluding China expanded even faster, at around 9 percent.

Okonjo-Iweala emphasized the importance of the multilateral trading system in maintaining stability but warned against complacency. She called for nations to rethink and strengthen the foundations of global trade to ensure greater prosperity worldwide.

Despite the positive revision for 2025, the WTO lowered its forecast for merchandise trade growth in 2026 to 0.5 percent, down from the previous estimate of 1.8 percent. The organization expects that higher tariffs and increased policy uncertainty will gradually dampen some of the effects seen from early import concentration. Rising input prices and slowing trade shipments suggest that inflation could pick up later in 2025 as inventories are drawn down in sectors most affected by tariffs.

The WTO’s April 2025 forecast anticipated some of these impacts, and with new tariffs taking effect in August, further consequences are expected to materialize later this year and into 2026. The global GDP growth projection stands at 2.7 percent for 2025 and 2.6 percent for 2026.

While the upward revision for 2025 reflects stronger inventory accumulation—especially of durable goods—at the start of the year, economists note that this buildup is unlikely to be fully reversed in 2026. The main downside risk to the forecast is the spread of restrictive trade measures and political uncertainty to more economies and sectors. On the other hand, sustained growth in AI-related goods and services could provide a medium-term boost to global trade.

Regionally, Asia and Africa are expected to see the fastest export volume growth in 2025. Modest gains are also anticipated in South and Central America, the Caribbean, and the Middle East, while Europe is likely to experience slower growth. North America and the Commonwealth of Independent States (CIS) face declining exports. Least developed countries (LDCs) are projected to post strong export increases but may encounter weakening trends ahead.

For imports, Africa and LDCs are expected to lead growth, while North America is forecasted to see a contraction. In 2026, only North America, Europe, and CIS are projected to improve their export performance; all regions are expected to show weaker import results.

The WTO also predicts that global services exports will slow from a growth rate of 6.8 percent in 2024 to 4.6 percent in 2025 and further to 4.4 percent in 2026. The organization continues to monitor developments closely as governments respond to shifting economic conditions and trade policies worldwide.