Daily TribuneThe World Economic Situation and Prospects report said international tourism showed signs of a robust recovery, particularly in East Asia and Western Asia, and is expected to reach pre-pandemic levels by 2024.
Global trade growth is expected to recover to 2.4 percent this year as trade in services, particularly tourism and transport, continued to rebound, according to the United Nations report.
The World Economic Situation and Prospects report said international tourism showed signs of a robust recovery, particularly in East Asia and Western Asia, and is expected to reach pre-pandemic levels by 2024.
“There is an emerging trend of realignment in international trade relations, with countries seeking to secure supply chains closer to home or from more resilient sources,” it said.
However, the report said this year’s projected growth in global trade remains below the pre-pandemic trend of 3.2 percent.
Shift in consumer spending
“A shift in consumer spending from goods to services, monetary tightening, a strong United States dollar, and geopolitical tensions impeded global trade. Exports from developing economies suffered setbacks, with demand from developed countries weakening and financial conditions restricting trade financing,” it added.
In 2023, global trade growth weakened significantly to an estimated 0.6 percent, a sharp decline from 5.7 percent in 2022.
Slump in merchandise trade
The report attributed the overall weakness in global trade last year to the slump in merchandise trade.
“Amid the recovery from the pandemic and pent-up demand, consumer spending increasingly shifted from goods to services. Weakening global demand, tighter monetary conditions, the lagged effect of a stronger dollar (the predominant currency of trade invoicing), and a shift towards services exerted downward pressure on merchandise trade,” it said.
The report also cited unresolved trade tensions, increasing trade-restrictive measures, and unexpected conflicts that created additional uncertainties, weighing on trade activities around the globe.
By contrast, trade in services continued to recover from the pandemic-induced downturn, with travel services driving the growth, it added.
