Trade growth has turned negative and is set to stagnate in the first half of 2023 due to deteriorating economic conditions and rising uncertainties, reported UNCTAD.
Global trade was worth a record $32 trillion in 2022.
UNCTAD reported that the global trade downturn in the fourth quarter of 2022 hit developing countries the hardest, as their imports and exports both fell by 6 per cent compared with the previous quarter.
The fall was largely due to the 7 per cent drop in exports from East Asian economies, according to UNCTAD.
READ: Global trade soars hitting record $7.7 trillion in 2022 first quarter
The report warns that “the current record levels of global debt, coupled with high interest rates, will continue to negatively affect the macroeconomic conditions of many countries.”
As of 30 November 2022, more than half of least developed and other low-income countries were either at high risk or already in debt distress.
UNCTAD reported that the outlook for trade remains uncertain amid ongoing geopolitical tensions and concerns about inflation, high commodity prices, and the risky combination of high interest rates and public debt.
READ: Geopolitics impacts Port of Hamburg as container volume drops
There was, however, a particularly strong performance of trade in “green goods”, whose growth held strong throughout the year, according to UNCTAD’s latest Global Trade Update.
Trade in green goods grew by roughly 4 per cent in the second half of the year, despite the overall downward trend of trade.
Its combined value hit a record $1.9 trillion in 2022, increasing by more than $100 billion from 2021.
UNCTAD expects green industries to grow as countries and industries scale up efforts to fight climate change and cut emissions.
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UNCTAD projected, in its recent Technology and Innovation Report 2023, that global market for electric cars, solar and wind energy, green hydrogen and a dozen other green technologies will reach $2.1 trillion by 2030 – four times more than their value today.
“The patterns of international trade are anticipated to become more closely tied to the transition towards a greener global economy,” the Global Trade Update reads.
This push to a greener economy has certainly been the case for the shipping industry.
In June 2022, Adani New Industries Ltd (ANIL) committed to a $50 billion investment to create the world’s largest green hydrogen ecosystem in partnership with TotalEnergies – marking India’s largest company commitment to green hydrogen.
More recently, Long Beach boss, Mario Cordero, announced the port’s bid to assemble and manufacture offshore wind turbines that will increase the state’s supply of renewable energy and reduce greenhouse gas emissions.