New Delhi: The World Trade Organization ( WTO) Tuesday slashed the 2026 merchandise trade growth forecast to 0.5% from 1.8% in August in as the impact of the cooling global economy and new tariffs set in. It also raised the 2025 merchandise trade growth forecast to 2.4% up from 0.9% in August, led by favourable macroeconomic conditions such as disinflation, supportive fiscal policies, and strong growth in emerging markets.
“World merchandise trade volume growth is expected to slow from 2.8% in 2024, to 2.4% in 2025 and 0.5% in 2026. The projection for global GDP growth is 2.7% for 2025 and 2.6% for 2026,” it said in its Global Trade Outlook.
Noting that the downgrade for 2026 results in a similar overall impact over the two-year horizon, it said: “This indicates that the tariff impact has shifted into 2026, with the slight improvement reflecting that some inventory build up in early 2025-particularly of durable goods-will not be fully reversed in 2026.”
“Global services exports growth is expected to slow from 6.8% in 2024 to 4.6% in 2025 and 4.4% in 2026,” it said.
WTO economists highlight that the key downside risk to the forecast is the spread of trade-restrictive measures and policy uncertainty to more economies and sectors. On the upside, sustained growth in trade for AI-related goods and services could provide a medium-term boost to global trade.
Strong growth in emerging markets and increased demand for AI-related goods — including semiconductors, servers, and telecommunications equipment — also fueled global trade growth, it added, with AI-related spending driving nearly half of the overall trade expansion in the first half of the year, rising 20% year-on-year in value terms.
The US accounted for roughly one-fifth of global AI-related trade growth in the first half of 2025, according to the report. The bulk of the expansion came from Asia, however, which accounted for nearly two-thirds of global AI-related trade growth in the same time period.
“World merchandise trade volume growth is expected to slow from 2.8% in 2024, to 2.4% in 2025 and 0.5% in 2026. The projection for global GDP growth is 2.7% for 2025 and 2.6% for 2026,” it said in its Global Trade Outlook.
Noting that the downgrade for 2026 results in a similar overall impact over the two-year horizon, it said: “This indicates that the tariff impact has shifted into 2026, with the slight improvement reflecting that some inventory build up in early 2025-particularly of durable goods-will not be fully reversed in 2026.”
“Global services exports growth is expected to slow from 6.8% in 2024 to 4.6% in 2025 and 4.4% in 2026,” it said.
WTO economists highlight that the key downside risk to the forecast is the spread of trade-restrictive measures and policy uncertainty to more economies and sectors. On the upside, sustained growth in trade for AI-related goods and services could provide a medium-term boost to global trade.
Strong growth in emerging markets and increased demand for AI-related goods — including semiconductors, servers, and telecommunications equipment — also fueled global trade growth, it added, with AI-related spending driving nearly half of the overall trade expansion in the first half of the year, rising 20% year-on-year in value terms.
The US accounted for roughly one-fifth of global AI-related trade growth in the first half of 2025, according to the report. The bulk of the expansion came from Asia, however, which accounted for nearly two-thirds of global AI-related trade growth in the same time period.
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