In 2025, global goods and services trade expanded by around 4.7%, exceeding world GDP growth of 2.9%. However, in 2026, trade growth is expected to align more closely with GDP, at around 2.7% versus 2.8%.
The WTO highlighted significant downside risks linked to the ongoing West Asian conflict. Sustained high oil prices could reduce merchandise trade growth by 0.5 percentage points, while the impact on services trade could be stronger, cutting growth by 0.7 percentage points due to pressures on international transport and travel.ALSO READ:
India demands permanent WTO solution on public stockholding before other agricultural issuesDisruptions in the Strait of Hormuz have emerged as a critical concern, with vessel traffic dropping from 138 ships per day to almost zero since the start of the conflict. The disruption has driven up energy prices as well as transport and insurance costs, contributing to broader inflationary pressures.
The blockade has also affected non-energy trade flows, including fertilisers, with around one-third of global exports typically passing through the strait.
The report warned that a prolonged conflict could keep fuel and transport costs structurally elevated, disrupt key shipping and air routes, and weigh on tourism and global travel demand. Reflecting these pressures, the West Asia crisis is projected to see a 9.2% contraction in services exports in 2026, which will subtract 15.7 percentage points from expected growth.
ALSO READ | Supreme Court rejects plea for probe into Vantara wildlife imports
Despite the slowdown, trade growth in 2025 was supported by strong demand for AI-related goods, which offset the impact of higher tariffs and elevated trade policy uncertainty. Continued strength in AI-related trade remains a potential upside risk for 2026, even as uncertainty persists, said the report.
