UNCTAD report notes global trade growth alongside increasing fragmentation risks
UN trade data highlights higher import costs and tighter financial conditions as key challenges facing vulnerable countries amid global uncertainty.
United Nations Conference on Trade and Development reports that global trade expanded by $2.5 trillion in 2025, reaching a total value of $35 trillion, driven by continued growth in goods and services.
Despite this expansion, the outlook has become more uncertain due to rising geopolitical tensions and disruptions to key shipping routes.
Conflicts in the Middle East and instability in critical maritime corridors are increasing energy and transport costs, placing additional pressure on developing economies. Higher import expenses and tighter financial conditions are limiting fiscal flexibility and constraining growth prospects in vulnerable regions.
While trade growth remains broad-based, services expansion has slowed, and much of the recent increase is linked to higher prices rather than volume gains. Emerging markets in East Asia and Africa remain central, supported by strong South–South trade and shifting supply chains.
The report notes that ongoing fragmentation in global trade, including US–China decoupling, is reshaping commercial flows and creating new ‘connector economies’. Although offering some value chain opportunities, inflation, debt pressures, and protectionism are expected to weigh on global trade growth in 2026.
Rising fragmentation and uneven growth highlight widening gaps in how countries benefit from globalisation, with developing economies most exposed to cost shocks and financial constraints.
Shifting global trade will shape investment flows, development prospects, and economic resilience, increasing the need for coordinated policy responses.
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