MercoPress. South Atlantic News Agency

Global trade expected to slow down in 2023, but “green goods” will remain strong, UNTAD report

Green goods, or “environmentally friendly goods”, refer to products that are designed to use fewer resources or emit less pollution than their traditional counterparts

Global trade was worth a record US$32 trillion in 2022, but amid deteriorating economic conditions, financial turmoil and rising uncertainties, growth turned negative in the last half of the year and is set to stagnate in the first half of 2023.

The silver lining was the strong performance of trade in “green goods”, whose growth held strong throughout the year, according to UNCTAD’s latest Global Trade Update, published last week.

Green goods, also called “environmentally friendly goods”, refer to products that are designed to use fewer resources or emit less pollution than their traditional counterparts.

Defying the downward trend, trade in such goods grew by about 4% in the second half of the year. Their combined value hit a record US$1.9 trillion in 2022, adding more than $100 billion compared to 2021.

Among green goods that performed especially well were electric and hybrid vehicles (+25%), non-plastic packaging (+20%) and wind turbines (+10%).

UNCTAD said it expects green industries to boom as countries scale up efforts to fight climate change and cut emissions.

The organization, in its recent Technology and Innovation Report 2023, projected the global market for electric cars, solar and wind energy, green hydrogen and a dozen other green technologies to reach US$2.1 trillion by 2030 – four times more than their value today.

“The patterns of international trade are anticipated to become more closely tied to the transition towards a greener global economy,” the Global Trade Update says.

While imports and exports of green goods held strong throughout 2022, most products saw their trade start to decline in the second half of the year – and the downturn continued in the fourth quarter.

The report shows that global trade in goods, worth US$25 trillion in 2022, declined by 3% in the fourth quarter. But trade in services remained almost constant, finishing the year at US$7 trillion.

UNCTAD now casts for the first quarter of 2023 that global trade in goods will increase by about 1% in terms of value. Meanwhile, trade in services is set to jump by about 3%, as demand continues to grow for information and communication technology services, and travel and tourism sectors recover further.

The transport equipment sector saw trade grow by 14% in the fourth quarter of 2022 – although the result for the year was -6%.

On the negative side of the spectrum, energy took the biggest fall in the fourth quarter of 2022, dropping by 10%. Yet the sector still reported 24% growth for the year.