Global trade expanded to about $35 trillion in 2025, but the momentum is expected to ease in 2026 as geopolitical tensions, higher trade costs and inflationary pressures weigh on the outlook, according to UN Trade and Development’s (UNCTAD) April 2026 Global Trade Update. The report said the value of global trade rose by about $2.5 trillion last year, with goods contributing roughly $1.8 trillion and services about $700 billion to the increase.
The update showed that trade remained robust in the first quarter of 2026, but warned that the rest of the year could be less favourable. UNCTAD said the early-year performance was being tested by the economic fallout from the conflict in the Middle East, disruptions in the Strait of Hormuz and broader policy uncertainty in major markets.
The report indicated that trade in goods and services grew by roughly 2 per cent quarter-on-quarter in the fourth quarter of 2025, with goods rising 1.7 per cent and services nearly 3 per cent. It added that the positive trend continued into the first quarter of 2026, with goods and services expected to grow by 2.5 per cent and 2 per cent respectively every quarter.
UNCTAD said trade growth in 2025 was supported mainly by developing economies in East Asia and Africa, alongside stronger South-South trade. It noted that trade flows were also shaped by the emergence of “connector economies” that helped redirect commerce amid the decoupling between the United States and China.
But the agency cautioned that the year ahead is likely to be more difficult. It pointed to “persistent uncertainty” in United States trade policy, including possible new tariffs, as well as rising energy costs, regulatory changes and the erosion of trade rules, all of which could add to trade frictions.
The report also said trade inflation fell in the fourth quarter of 2025 but rose again to nearly 1.5 per cent quarter-on-quarter in the first quarter of 2026, suggesting that some of the increase in trade value is being driven by prices rather than volumes. It said this pointed to trade growth that remains “relatively weak” beneath the headline numbers.
UNCTAD’s outlook for 2026 remains guarded despite strong sectors such as digital technologies, green industries and AI-related goods. It said these areas may continue to support global trade, but are unlikely to offset the wider pressures from geopolitics, fragmentation and weaker demand conditions.
Openness and regional cooperation could still support developing economies, particularly through intra-regional and South-South trade. Even so, UNCTAD said the balance of risks in the coming quarters is tilted to the downside compared with the strong performance recorded in 2025.
