The WTO has raised its forecast for global merchandise trade growth in 2025 to 2.4%, up from 0.9%, driven by stronger-than-expected first-half performance, front-loaded imports, and soaring demand for AI-related products like semiconductors, servers, and cloud infrastructure. Despite tariff tensions, particularly from the U.S., South-South trade expanded 8%, outpacing overall world trade, with Asia and Africa leading export growth. Services trade continues to outpace goods, projected to grow 4.6%, supported by AI-driven digital services, with Europe expected to lead growth. Global GDP growth is forecast to ease slightly from 2.7% in 2025 to 2.6% in 2026.
The World Trade Organization (WTO) has sharply raised its forecast for global merchandise trade growth in 2025 to 2.4%, up from the 0.9% estimated in August, citing a stronger-than-expected performance in the first half of the year.
According to the WTO’s Global Trade Outlook and Statistics report, world goods trade expanded 4.9% in the first half of 2025, measured by the average of exports and imports. In current US dollar terms, the value of global merchandise trade rose 6% year-on-year in the first half of 2025, building on a 2% increase recorded in 2024.
The report highlighted that earlier in April, the WTO had anticipated a 0.2% contraction in global trade volumes amid the emergence of new tariff tensions, particularly involving the United States. Since taking office in January, President Trump’s tariff measures have unsettled financial markets and injected significant uncertainty into the global economy. On August 7, he announced higher tariffs on imports from several countries, prompting key trading partners such as Switzerland, Brazil, and India to seek revised agreements.
Meanwhile, the European Union reached a deal setting 15% tariffs on most EU goods entering the United States.
Key drivers and regional trade dynamics
The WTO projects global trade to grow in 2025, but expects a slowdown in 2026, lowering next year’s forecast to 0.5% from 2.5% in April. This revision indicates that the negative effects of tariffs are likely to be felt more acutely in 2026. The modest improvement for 2025 reflects early inventory build up—especially of durable goods—that is expected to unwind only partially next year.
The report noted that much of the current momentum is driven by importers front-loading orders in anticipation of potential tariff hikes or retaliatory trade measures.
Another major factor has been the surging demand for AI-related products such as semiconductors, servers, computers, and manufacturing equipment, which are fueling a global wave of investment in artificial intelligence infrastructure.
According to WTO Director-General Ngozi Okonjo-Iweala, AI-related goods accounted for nearly 42% of global trade growth in the first half of 2025, even though they made up only 15% of total world trade.
The United States, in particular, has seen record-high inventory values. North America’s imports jumped 13.2% year-on-year in the first quarter, led by strong demand for pharmaceuticals and precious metals, especially gold. Additional factors boosting North American imports included higher demand for machinery, motor vehicles, lumber, construction equipment, and various non-durable goods.
Despite the tariff-induced disruptions, global trade continued to expand. With most WTO members maintaining regular trade relations, supply chains have realigned toward areas of stronger demand. As a result, South-South trade expanded by 8% year-on-year in value terms during the first half of 2025, outpacing the 6% growth in overall world trade. Rough estimates further suggest that South-South trade excluding China grew even faster, at about 9%.
As per the report, Asia and Africa are expected to register the fastest export growth this year, whereas Europe’s exports are likely to slow and North America’s to fall. In 2026, all regions are projected to see softer import performance.
Meanwhile, global services trade continues to outpace goods trade. The WTO projects 4.6% growth in services trade in 2025, up slightly from the April estimate but still below the beginning-of-year forecast.
Services export growth, which stood at 6.8% in 2024, is expected to ease to 4.6% in 2025 and 4.4% in 2026. Although services trade is not directly affected by tariffs, it feels the impact indirectly through slower GDP growth and weaker demand for transport and tourism.
The WTO noted that AI is also influencing this sector, fuelling rising demand for computer services. According to the WTO report, trade growth extended across the digital value chain, from raw silicon and specialty gases to devices supporting cloud platforms and AI applications. The report highlighted that Asia’s exports, particularly in AI-related products, were especially strong, reflecting the global surge in investment in this sector.
The report added that Europe is expected to lead services export growth in 2025, followed by Asia, the Middle East, and the Commonwealth of Independent States (CIS).
The WTO further forecasts a slight moderation in global GDP growth, easing from 2.7% in 2025 to 2.6% in 2026.
India’s trade momentum gains pace amid strong export performance
According to World Bank data, global exports grew at 2.5% in 2024, while India’s exports expanded by 7.1%, outpacing the world and underscoring the country’s rising prominence in international trade.
The export-to-GDP ratio in India has also increased, from 19.8% in 2015 to 21.2% in 2024, reflecting the growing significance of exports in the national economy.
India’s trade momentum continued into the first five months of FY 2025–26, with total exports (merchandise and services combined) rising 5.19% during April–August 2025 compared to the same period in 2024. The total export value for April–August 2025 reached US$ 346.10 billion, up from US$ 329.03 billion in April–August 2024. Of this, merchandise exports accounted for 53.09%, while services exports made up 46.91%. Month-on-month growth was also notable, with exports in August 2025 up 4.77% compared to August 2024.
Recognizing this positive trajectory, the government has set an ambitious target of US$ 1 trillion in exports for FY 2025–26, of which 34.61% has already been achieved in the first five months.
Fuelled by government reforms, digital transformation, and entrepreneurial dynamism, India’s export sector is entering a new era of possibilities. It is increasingly capturing global attention and reinforcing the vision of Atmanirbhar Bharat on the international stage, positioning the country as a key player in global trade.
Read more:
AI goods and frontloading lift world trade in 2025
Export Surge: India Steps Up on Global Stage
FAQ:
What is the WTO’s forecast for global merchandise trade in 2025?
The WTO has raised its forecast to 2.4%, up from 0.9% projected in August 2025, reflecting stronger-than-expected trade in the first half of the year.
What factors are driving global trade growth in 2025?
Key drivers include AI-related product demand, front-loading of imports due to potential tariffs, and strong trade in South-South regions.
Which regions are leading export growth?
Asia and Africa are expected to see the fastest merchandise export growth, while South-South trade expanded 8% year-on-year.
How is services trade performing?
Global services trade continues to outpace goods, projected to grow 4.6% in 2025, supported by AI-driven demand for digital and computer services. AI-related products, including semiconductors, servers, and cloud infrastructure devices, contributed to 42% of global trade growth in the first half of 2025, despite representing only 15% of total trade.
Which regions are leading services export growth?
Europe is expected to lead services export growth, followed by Asia, the Middle East, and the CIS.
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