The latest ‘Global Trade Update’ from UN Trade and Development (Unctad), released on October 9, shows that global trade expanded by about $500-billion in the first half of the year, despite volatility, policy shifts and persistent geopolitical tensions.

Global trade in goods and services continued its positive trajectory in the second quarter, recording a quarter-on-quarter increase of about 2.5%.

Both goods and services saw significant gains compared with the first quarter of the year.

Trade in goods saw its growth rate edge up from about 2% to 2.5% quarter-on-quarter, while growth in trade in services returned to positive territory after contracting in the first quarter.

South Africa’s goods imports growth and exports growth both fell by 1% quarter-on-quarter. Its services imports growth fell by 3% quarter-on-quarter, while services exports growth fell by 4%. However, in terms of trailing four quarters, this rose 8% for service imports growth, and 12% for service exports growth.

On a trailing four quarters basis, growth remains robust – about 5% for goods and 6% for services.

Growth in the second quarter was driven primarily by developing economies, supported by South-South trade. Weak trade performance by the US pulled down the global average.

The manufacturing sector continues to drive global trade growth, led by electronics.

Hybrid and electric vehicles are driving automotive trade growth, according to the report.

Momentum is expected to continue in the third quarter, with goods expected to expand by about 2.5% quarter over quarter and services accelerating sharply by around 4%.

The negative impact of trade policy uncertainty has remained relatively contained, keeping the overall outlook for global trade this year strongly positive, the report indicates.

Barring major negative shocks in the final months of this year, the value of global trade is projected to surpass its record levels of 2024; however, growth patterns are likely to vary regionally.

The ‘Global Trade Update’ is a monthly Unctad publication analysing trade policy and global trade data.