Global Trade Growth May Slow to 1.9% in 2026 as WTO Flags Energy Risks

The World Trade Organisation has projected a slower pace of global trade in 2026, warning that continued tensions in West Asia could further weaken the outlook. 

Under its baseline scenario, world merchandise trade volume is expected to grow 1.9% in 2026, down from 4.6% in 2025. If crude oil and liquefied natural gas prices remain elevated through next year, that growth could slow to 1.4%.

WTO Projects Weaker Momentum Next Year

Strong demand for AI-linked goods and early import orders placed ahead of possible tariffs helped push volumes higher this year, but that boost is not expected to carry over into 2026. 

The WTO also expects overall trade in goods and services to grow 2.7% in 2026, while global GDP growth is projected at 2.8%.

The Strait of Hormuz Concerns Extend to the Agricultural Supply

The WTO has linked that risk to conflict in West Asia, particularly around the Strait of Hormuz, a key route for oil and gas shipments. 

Now the concern is not limited to crude oil and liquefied natural gas. The route is also critical for fertiliser shipments, making any disruption important for agriculture and food security. 

International Export Market Expected Growth in 2026

Regionally, Asia is expected to lead both import and export growth in 2026 under the baseline scenario, followed by Africa and South America. 

Europe’s outlook is likely to remain subdued, while North America’s import growth is expected to stay nearly flat. 

However, if energy prices remain high, Asia and Europe are likely to take the sharpest hit due to their dependence on imported fuel.

WTO Outlook for 2026

The WTO has said sustained increases in energy prices would not only weigh on cross-border commerce but also raise costs for businesses and consumers. It has also warned of spillovers into food security and broader supply-chain stress. According to Director-General Ngozi Okonjo-Iweala, predictable trade policies and stronger supply-chain resilience will be important to limit the economic burden.

Source: https://www.moneycontrol.com/

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