New Delhi, March 15: India outperformed global trade averages with services exports driving growth as total world trade hit a record $33 trillion in 2024, expanding 3.7 per cent, according to the latest Global Trade Update by UN Trade and Development (UNCTAD).

However, the report warns that while global trade remains strong with a $1.2 trillion year-on-year increase in 2024, uncertainty looms in 2025.

Services drove growth, rising 9 per cent for the year and adding $700 billion – nearly 60 per cent of the total growth. Trade in goods grew 2 per cent, contributing $500 billion, according to the report.

Most regions saw positive growth, except for Europe and Central Asia. Growth varied by industry - agri-food, communication technology and transport saw gains, while energy, apparel and extractives slowed due to weaker demand and policy shifts, the UNCTAD report said.

However, momentum slowed in the second half of the year. In the fourth quarter, trade in goods grew by less than 0.5 per cent, and services edged up just 1 per cent.

Trade remained stable in early 2025, but mounting geoeconomic tensions, protectionist policies and trade disputes signal likely disruptions ahead, the report said.

Falling shipping indexes signal weaker demand for manufactured goods, inputs and commodities as businesses adjust to increasing uncertainty.

The challenge in 2025 is to prevent global fragmentation – where nations form isolated trade blocs – while managing policy shifts without undermining long-term growth, the report pointed out.

Trade inflation neared zero as prices for traded goods stabilised in the last quarter of 2024. The lingering effects of high post-pandemic inflation appear to have run their course, the report observed.

In 2024, developing economies outpaced developed nations, with imports and exports rising 4 per cent for the year and 2 per cent in the fourth quarter, driven mainly by East and South Asia. South-South trade expanded 5 per cent annually and 4 per cent in the last quarter.

"China and India outperformed global trade averages. In contrast, trade in the Russian Federation, South Africa, and Brazil remained sluggish for most of the year, with some improvement in the fourth quarter," the report said.

Meanwhile, developed economies' trade stagnated, with imports and exports flat for the year and down 2 per cent in the last quarter.

Merchandise trade imbalances widened in 2024, as they returned to 2022 levels.

The US trade deficit with China reached -$355 billion, widening by $14 billion in the fourth quarter, while its deficit with the European Union (EU) increased by $12 billion to -$241 billion.

Meanwhile, China's strong exports pushed its trade surplus to the highest level since 2022. The EU reversed previous deficits and posted a trade surplus for the year, helped by high energy prices, the report added. (IANS)

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