The United Nations Conference on Trade and Development (UNCTAD) released a report on the 8th indicating that, although global trade is expected to grow by US$300 billion (about RM127.65 billion) in the first half of this year, global trade will face increasing obstacles and heightened uncertainty in the second half, due to factors such as uncertainty in U.S. trade policy and rising geopolitical tensions worldwide.
The report states that global trade grew by about 1.5% in the first quarter of this year, and is expected to grow by 2% in the second quarter. Price increases have been the main driver of global trade value growth, but trade volume has only increased by 1%. Trade in services remains the main engine of global trade growth, with a 9% increase over the past four quarters.
The report shows that global trade imbalances have intensified, with the U.S. trade deficit continuing to widen over the past four quarters.
The report warns that the risk of trade fragmentation caused by recent U.S. tariff measures is mounting. Further unilateral actions the U.S. may take could trigger an escalation in trade tensions and undermine the stability of global supply chains.