According to a World Trade Organization report, global trade expansion is forecast to slow in 2026 after stronger growth in 2025. The projected deceleration follows a surge in commerce related to artificial intelligence products and a pattern of import frontloading ahead of new tariffs.

Read also: WTO Flags Fragile Trade Outlook as Middle East Tensions Threaten Energy and Shipping Stability

The baseline scenario anticipates merchandise trade volume growth will ease to 1.9% in 2026 from 4.6% in 2025, before a slight rebound to 2.6% in 2027. Combined growth for goods and services trade is expected to be 2.7% in 2026, down from 4.7% the previous year. Global economic output growth is projected to moderate slightly from 2.9% in 2025 to 2.8% in both 2026 and 2027.

However, the outlook faces significant pressure from ongoing conflict in the Middle East. WTO economists warn that sustained high energy prices could reduce the 2026 GDP forecast by 0.3 percentage points and cut the trade growth forecast by 0.5 percentage points. In such a scenario, merchandise trade growth could be as low as 1.4% for the year. Services trade growth would also slow, potentially reaching only 4.1% in 2026.

The conflict has severely disrupted key transport corridors, with commercial vessel traffic through the Strait of Hormuz collapsing. This has led to cancelled flights and increased transport and insurance costs. The blockade also affects global fertilizer supplies, with a significant portion of global exports normally passing through the waterway. Several major agricultural producers rely heavily on the region for urea imports.

WTO leadership noted that the baseline forecast demonstrates trade resilience, supported by high-technology products and digitally delivered services, along with adaptations in supply chains. Yet they emphasized that predictable trade policies and strengthened supply chain resilience are needed to cushion potential economic impacts.

Regional variations are expected under the baseline forecast. Asia is projected to see the fastest merchandise import growth in 2026, followed by Africa and South America. North American import growth would remain nearly flat, while imports in the Commonwealth of Independent States region are forecast to contract. On the export side, Asia and South America are expected to lead regional growth. Least-developed countries are forecast to see merchandise import growth of 4.5% and export growth of 2.9% in 2026. Net fuel-importing regions would face the largest reductions in import growth under a high energy price scenario, while net fuel exporters able to continue exports would generally see more income and import growth.

Services trade volume, which rose 5.3% in 2025, is projected to grow 4.8% in 2026 and 5.1% in 2027 under the baseline forecast. An adjusted scenario accounting for the Middle East conflict’s impact shows services trade expanding at a slower 4.1% in 2026 before recovering.

There remains potential for improvement if the conflict ends quickly and strong spending on artificial intelligence continues. In that case, merchandise trade growth in 2026 could be boosted by 0.5 percentage points. Data indicates trade in AI-enabling goods saw a substantial increase in value in 2025, accounting for a large share of total global trade growth despite representing a smaller portion of overall trade. Key products in this category have been exempt from most new tariffs.

The overall negative impact of tariffs in 2025 was less than initially predicted due to the suspension of new U.S. tariffs until August, limited retaliation from other economies, and numerous tariff exemptions.

Source: IndexBox Market Intelligence Platform