World trade is on track to reach a record $33-trillion this year, but risks of expanded trade wars and ongoing geopolitical challenges cast uncertainty over the outlook for 2025, says global trade body United Nations Trade and Development (Unctad).

The $33-trillion for this year represents a $1-trillion, or 3.3%, year-on-year increase largely driven by a 7% rise in services trade and highlights the resilience in global trade despite persistent challenges.

Robust growth in services trade accounted for half of the expansion, while goods trade rose 2%, but remained below its 2022 peak, Unctad says.

Developing economies, traditionally strong drivers of global trade, faced headwinds this year, with imports having contracted by 1% and South-South trade having fallen by the same margin in the third quarter.

In contrast, developed economies led third-quarter growth, with stable demand driving a 3% rise in imports and 2% in exports.

Developing economies face slower trade growth, but high-growth sectors like information and communication technology (ICT) and apparel offer opportunities for diversification and resilience.

ICT increased by 13% and apparel trade surged by 14% in the third quarter of 2024. This growth underscores the potential for diversification and entry into value-added industries, and developing economies can capitalise on high-growth sectors.

Stable global growth forecasts and easing inflation also present a chance for developing economies to build resilience in 2025 and strengthen their trade position amid rising geopolitical uncertainties, the trade organisation adds.

Unctad urges developing economies to adopt targeted policies that enhance trade diversification and invest in high-value sectors to mitigate risks.

“Trade remains a cornerstone of sustainable development. To seize the opportunities in 2025, developing economies need coordinated support to navigate uncertainty, reduce dependencies, and strengthen their links to global markets,” says Unctad secretary-general Rebeca Grynspan.

Further, while ICT and apparel showed strong momentum, traditional sectors critical to developing economies faced declines, Unctad highlights.

Energy trade fell 2% for the quarter and 7% for the year, while metals trade contracted by 3% both quarterly and annually. Automotive trade dropped 3% in the third quarter, but is expected to end the year with modest 4% growth.