WTO Revises 2025 World Trade Forecast To +0.9%, Powered by US Frontloading But 2026 Outlook Weaker
SDG 8: Decent Work and Economic Growth
SDG 17: Partnerships for the Goals
Institutions: Ministry of Commerce and Industry; Reserve Bank of India
The WTOβs updated forecast projects global merchandise trade to grow by 0.9% in 2025 - up from a projected contraction of 0.2% - mainly due to frontloading of US imports in anticipation of tariff increases. The U.S. experienced an 11% year-on-year volume jump in imports during the first half of 2025, including a sharp 14% quarter-on-quarter spike in Q1, though inventory correction is expected to drag on demand through late 2025 and into 2026. Meanwhile, improved macroeconomic conditions and a weaker US dollar have bolstered growth prospects, along with easing oil prices aiding manufacturing economies.
Despite the short-term boost, tariffs introduced in August are expected to depress trade, reducing 2026 growth expectations - including for North America and Europe - while Asia remains a key growth driver. WTO Director-General Ngozi Okonjo-Iweala warned that tariff uncertainty continues to weigh on business confidence and supply chains, even though so far retaliatory spirals have been avoided. The WTO Secretariat will continue monitoring developments and working with members to restore stability and predictability to the trading system.
Relevant question for policy stakeholders: How can India prepare for potential trade volatility by adapting its inventory strategy and export planning, especially in sectors exposed to tariff-driven frontloading and subsequent demand correction?
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https://www.wto.org/english/news_e/news25_e/tfore_08aug25_e.htm