Global trade growth is expected to moderate in 2026 as a combination of weaker global economic expansion, geopolitical tensions, rising trade costs, and policy uncertainty weighs on cross-border commerce.
This is according to the latest Global Trade Update published by the United Nations Conference on Trade and Development (UNCTAD) in December 2025.
According to the report, slowing economic growth across major economies, increasing geopolitical fragmentation, and persistent vulnerabilities in the global trading system are likely to dampen trade activity.
UNCTAD noted that although import demand in some consumer-driven markets and sectors—particularly digital technologies and environmental industries—could provide limited support, such gains are unlikely to fully offset the broader slowdown. Rising trade frictions and higher costs associated with logistics, financing, and compliance are also expected to constrain trade flows.
Optimistic trade outlook for Nigeria, developing countries
The agency struck a more optimistic tone for developing regions, where sentiment toward trade remains broadly supportive.
UNCTAD said many developing economies continue to commit to openness and cross-border investment, creating conditions for the expansion of intra-regional trade and South–South commerce.
This trend, it added, could help cushion the impact of weaker global demand.
“All factors considered, expectations for the next few quarters point to a continuing deceleration in global trade growth, with trade performance likely to be uneven across countries and sectors,” UNCTAD noted.
Despite the cautious outlook for 2026, UNCTAD highlighted a stronger near-term performance.
“Trade growth remained positive in Q3 2025, supported by developing economies, strong South–South trade, and robust performance in Africa and East Asia. UNCTAD nowcast for Q4 2025 indicates continued growth. In 2025, international trade is set to grow faster than the global economy (in real terms), reflecting renewed momentum in cross-border trade,” the agency noted.
More insights
The report further shows that global trade growth slowed in Q3 2025 but remained positive at about 2.5 per cent quarter-on-quarter.
UNCTAD forecast that global trade in 2025 will exceed $35 trillion, an increase of around $2.2 trillion—roughly 7 per cent—compared to 2024.
“After two periods of inflationary trends, prices for traded goods are expected to decline in Q4 2025. This suggests that while the increase in trade value in Q2 and Q3 2025 was partly driven by higher prices, the increase in Q4 is expected to be fueled by rising volumes,” UNCTAD stated.
What you should know
UNCTAD stated that Nigeria and other developing economies lagged behind in global trade growth and digital market participation during the first quarter of 2025.
UNCTAD stated that merchandise trade growth in Q1 2025 was driven predominantly by developed economies.
Nairametrics reports that Nigeria’s total merchandise trade rose to N38.9 trillion in the third quarter of 2025.
