The Middle East is set to become the world’s fastest-growing region for merchandise imports and the second-fastest for exports by 2025, according to the World Trade Organization (WTO). This projection comes despite the region’s ongoing instability and the uncertainties caused by geopolitical conflicts.
In its latest bi-annual trade outlook, titled Global Trade Outlook and Statistics, the WTO forecasted that global trade growth will be impacted by regional conflicts and policy uncertainties. However, Asia is expected to lead the world in export growth in 2025, with exports rising by 7.4%. The Middle East will follow with a 4.7% increase, outpacing South America (4.6%), the Commonwealth of Independent States (CIS) region (4.5%), and Africa (2.5%).
On the import side, the Middle East is projected to see a remarkable 9% growth, making it the fastest-growing region for imports globally. South America is expected to follow with 5.6% growth, with Asia (4.3%), North America (3.3%), and Africa (1.0%) trailing behind. Europe, on the other hand, is expected to experience a decline, with imports shrinking by 2.3%.
The report highlights the potential risks posed by the ongoing conflicts in the Middle East. An escalation in violence could further disrupt trade routes, including critical shipping lanes like the Red Sea, and lead to higher energy prices due to the region’s role as a major petroleum producer. These factors would negatively impact global economic growth, particularly in energy-importing economies, and could dampen trade.
“While the disruptive impact of the Red Sea crisis has been contained to date, other routes could be impacted in a wider conflict. There would also be a heightened risk of energy supply disruptions,” the WTO warned in its report.
Despite these challenges, global trade has shown resilience in the first half of 2024, with a 2.3% year-on-year increase following a 1.1% slump in 2023. The earlier decline was driven by high inflation and rising interest rates. For 2024, the WTO has revised its forecast for merchandise trade growth to 2.7%, up slightly from its previous estimate of 2.6%.
In terms of global GDP growth, the WTO projects steady growth of 2.7% from 2023 to 2025. Asia is expected to lead with a 4.0% increase in output in 2024, while Europe is likely to lag behind with just 1.1% growth. Europe’s weak performance, particularly in sectors like chemicals and automotive, has been a drag on global merchandise trade.
The WTO also noted that countries like India and Vietnam are playing an increasingly important role in global trade, with rising imports from these nations as they position themselves as “connecting economies.” Meanwhile, Asian exports are experiencing a rebound, driven by strong performances from key economies like China, Singapore, and South Korea.
Despite the uncertainties, the Middle East’s growing role in global trade underscores its increasing importance in the global economic landscape, with both imports and exports poised for significant growth in the years ahead.
