World trade is on track to hit a record US$33 trillion in 2024, but risks of expanded trade wars and ongoing geopolitical challenges cast uncertainty over the outlook for 2025.

The United Nations Conference on Trade and Development (UNCTAD)—the UN's leading institution dealing with trade and development—said in a new report that global trade's US$33 trillion value is an all-time high, with a US$1 trillion increase largely driven by a 7% rise in services trade.

According to the latest Global Trade Update by UNCTAD, this US$1 trillion increase reflects 3.3% annual growth and highlights resilience in global trade despite persistent challenges. 

Robust growth in services trade, up 7% for the year, accounted for half of the expansion, while goods trade rose 2% but remained below its 2022 peak.

Opportunities amidst uncertainty

UNCTAD said developing economies face slower trade growth, but high-growth sectors like information and communication technology (ICT) and apparel offer opportunities for diversification and resilience.

"Developing economies, traditionally strong drivers of global trade, faced headwinds in 2024, with imports contracting 1% and South-South trade falling by the same margin in the third quarter," the report said.

It added that, in contrast, developed economies led Q3 growth, with stable demand driving a 3% rise in imports and 2% in exports.

 [Source: UNCTAD]

"Despite these challenges, opportunities remain for developing economies to capitalize on high-growth sectors," the UN agency added.

It noted that ICT and apparel trade surged, with increases of 13% and 14%, respectively, in the third quarter of 2024 — underscoring the potential for diversification and entry into value-added industries.

"Stable global growth forecasts and easing inflation also present a chance to build resilience in 2025," UNCTAAD said.

Sectoral pressures and growth prospects

While ICT and apparel showed strong momentum, traditional sectors critical to developing economies faced declines.

The report said energy trade fell 2% for the quarter and 7% for the year, while metals trade contracted by 3% both quarterly and annually.

Automotive trade dropped 3% in Q3 but is expected to end the year with a modest 4% growth.

UNCTAD urges developing economies to adopt targeted policies that enhance trade diversification and invest in high-value sectors to mitigate risks.

It noted that stable global growth and easing inflation create a window for developing economies to strengthen their trade position amid rising geopolitical uncertainties.

"Trade remains a cornerstone of sustainable development," said UNCTAD Secretary-General Rebeca Grynspan.

"To seize the opportunities in 2025, developing economies need coordinated support to navigate uncertainty, reduce dependencies, and strengthen their links to global markets," she added.