Deteriorating economic conditions and rising uncertainties have resulted in a trade slow-down during the second half of  2022. However, the decline in global trade has been nominal, as the volume of trade continued to increase throughout  2022, a signal of resilient global demand. Part of the decline in the value of international trade during the second half of  2022 is due to a decrease in the prices of primary products, especially energy. By contrast, the prices of internationally  traded intermediate inputs and consumer goods have continued to increase during the same period, raising additional  concerns about persisting global inflation. The decline in the value of global trade has been so far limited to goods. Trade  in services has been more resilient, with its value continuing to rise during the second half of 2022. The ongoing trade  slowdown is expected to worsen for 2023. While the outlook for global trade remains uncertain, negative factors appear  to outweigh positive trends.

Negative factors: • Lower economic growth  Economic growth forecasts for 2023 are being revised downwards due to high energy prices, rising interest rates,  sustained inflation in many economies, and negative global economic spillovers from the war in Ukraine. 

• High prices of traded goods Persistently high energy prices and the continued rise in the prices of intermediate inputs and consumers goods are  expected to dampen demand for imports and to lead to a decline in the volume of international trade.

• Concerns of debt sustainability The record levels of global debt and the increase in interest rates pose significant concerns for debt sustainability. The  ongoing tightening of financial conditions is expected to further heighten pressure on highly indebted governments,  amplifying vulnerabilities and negatively affecting investments and international trade flows.