Global Trade to Expand 7% as Volumes Outpace Price Increases

Global trade is projected to grow about 7% in 2025, adding US$2.2 trillion and reaching a new all-time high. The strongest contributions are expected to come from East Asia, Africa, and South-South trade. Manufacturing, especially electronics, remains the main growth engine, while the energy and automotive sectors continue to lag. Trade imbalances remain significant, and geopolitical fragmentation is reshaping supply chains as friendshoring and nearshoring gain renewed strength.

According to UNCTAD’s final Global Trade Update of the year, total global trade is on track to surpass US$35 trillion in 2025 for the first time. The new figures show that trade continued to expand through the 2H25, even as rising costs, uneven demand, and geopolitical tensions softened momentum.

Between July and September, global trade increased 2.5% compared with 2Q25, with goods up nearly 2% and services up 4%. Growth is expected to continue in 4Q25 but at a more moderate rate, 0.5% for goods and 2% for services. If these projections hold, goods would add about US$1.5 billion and services US$750 million, aligned with an annual increase of about 7%.

After two quarters in which trade values rose partly due to increasing goods prices, those prices are now expected to decline. This means the end-of-year expansion stems mostly from higher trade volumes rather than price increases, suggesting steady global demand as inflation eases.

East Asia recorded the strongest export performance over the past year, with a 9% increase supported by a 10% rise in intra-regional trade. Africa also posted solid results, with imports up 10% and exports 6%. Trade among Global South economies grew around 8%, reflecting deeper South–South integration.

China and South Korea were the main contributors in East Asia, while Brazil and South Africa played major roles in South America and Africa. India and China also reported some of the fastest growth in services trade, underscoring the expanding influence of emerging economies.

Sector Performance: Manufacturing Leads, Autos Struggle

Manufacturing grew 10% year-on-year, driven by a 14% jump in electronics linked to AI-related demand. Agriculture also performed well in 3Q25, with cereals and fruit-and-vegetable exports rising 11%. In contrast, automotive trade fell 4%, and fossil-fuel trade declined due to lower energy prices.

Trade in 2025 expanded faster than the global economy, reversing the stagnation of 2023–2024. However, structural imbalances remain high, and the shift toward friendshoring and nearshoring gained strength, reshaping trade patterns and increasing concentration. “Looking to 2026, UNCTAD expects weaker growth as slower global activity, rising debt, higher trade costs, and persistent uncertainty weigh on performance,” said UNCTAD.

Mexico’s 2026 Forecast

Last month, Moody's Ratings revised downward its 2026 economic growth projections for Mexico in its latest Global Economic Outlook for 2026 and 2027. The agency now expects Mexico’s GDP to expand 1.2%, down from 1.7% forecast in August. The projection sits below the 1.5% average growth anticipated for G20 economies, which together represent more than 80% of global GDP.

Within this group, which includes China, India, Brazil, Russia, Indonesia, Turkey, Saudi Arabia, Argentina, and South Africa, Mexico’s outlook ranks among the weakest, far behind India’s projected 6.4% growth.

Mexico’s economy contracted 0.3% year-on-year in 3Q25, according to figures from INEGI. The downturn was led by a 2.9% fall in secondary activities such as manufacturing, construction, mining, and energy generation. Services and commerce, which make up the largest share of GDP, also slipped 0.9%, while agriculture grew 3%, not enough to offset broader weakness.