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A new report by the United Nations Conference on Trade and Development (UNCTAD), Global Trade Update, which was released on 11 December 2023, says global trade is projected to end the year 5% down compared to 2022’s record level, shrinking by about $1.5 trillion to below $31 trillion.

The report says the outlook for 2024 remains “highly uncertain and generally pessimistic,” citing factors like ongoing geopolitical tensions, escalating debt, and widespread economic fragility. Other elements weighing on trade include lower demand in developed countries, less trade in East Asia, an uptick in trade-restrictive measures, commodity price volatility, and lengthening supply chains, particularly between China and the United States.

However, the report notes a few positive trends in 2023. These include a slight increase in trade volumes, suggesting resilient global demand for imports, and a $500 billion increase in trade in services. The sector grew by 7% in 2023 thanks in part to a delayed COVID-19 recovery.

The report shows that global trade patterns are increasingly influenced by geopolitics, with countries showing preferences for politically aligned trade partners, a trend termed "friend-shoring".