During the first quarter of 2023, world trade growth was positive for both goods and services, according to UNCTAD‘s latest Global Trade Update.

Following a slowdown in the second half of 2022, world merchandise trade rebounded in both volume and value.

In the first three months of 2023, merchandise trade increased by 1.9% over the last quarter of 2022, totaling around $100 billion.

World trade in services also increased by about $50 billion, 2.8% higher than in the previous quarter.

Global trade trends over the past four quarters were influenced by the energy sector, where higher prices translated into higher trade values, to a quarterly drop of 11% between January and March 2023.

Other sectors that experienced trade increases were agri-food products, apparel, chemicals and road vehicles.

In contrast, trade declined in office and communication equipment, as well as transportation, where downward trends continued in the first quarter of 2023.

Global trade

«Overall, the outlook for world trade in the second half of 2023 is pessimistic, as negative factors predominate over positive ones,» UNCTAD said Wednesday.

During 2022 and the first quarter of 2023, the geographical proximity of international trade remained relatively stable, suggesting an absence of significant nearshoring or farshoring trends, at least on average. However, there has been a notable increase in the political proximity of trade since the latter part of 2022.

This indicates a reorientation of bilateral trade flows to prioritize countries that share similar political values (friend-shoring).

At the same time, there has been a decline in the diversification of trading partners, implying that global trade has become more concentrated among major trading relationships.

The war in Ukraine, the decoupling of trade interdependence between the United States and China, and the consequences of Brexit have played a significant role in shaping key bilateral trade trends during this period.