•Rising geo-economic tensions, protectionism, trade disputes may cause disruptions in 2025   •US’ trade deficit with China reaches -$355bn

•Global debt now three times more than GDP  

•At $97.83tn, US accounts for a third of world’s $318.4tn total debt

Ndubuisi Francis in Abuja

Global trade hit a record $33 trillion in 2024, expanding 3.7 per cent ($1.2 trillion), according to the latest Global Trade Update by UN Trade and Development (UNCTAD), which warned that while trade remains strong, uncertainty looms in 2025.

According to UNCTAD, services drove growth, rising 9 per cent for the year and adding $700 billion – nearly 60 per cent of the total growth.

Trade in goods grew 2 per cent, contributing $500 billion. Most regions saw positive growth, except for Europe and Central Asia.

Growth varied by industry – agri-food, communication technology and transport saw gains, while energy, apparel and extractives slowed due to weaker demand and policy shifts.

However, momentum slowed in the second half of the year. In the fourth quarter, trade in goods grew by less than 0.5 per cent, and services edged up just 1 per cent.

Trade inflation neared zero as prices for traded goods stabilized in the last quarter of 2024.

The lingering effects of high post-pandemic inflation appear to have run their course.

In 2024, developing economies outpaced developed nations, with imports and exports rising 4 per cent for the year and 2 per cent in the fourth quarter, driven mainly by East and South Asia. South-South trade expanded 5 per cent annually and 4 per cent in the last quarter.

China and India outperformed global trade averages. In contrast, trade in the Russian Federation, South Africa, and Brazil remained sluggish for most of the year, with some improvement in the fourth quarter.

Meanwhile, developed economies’ trade stagnated, with imports and exports flat for the year and down 2% in the last quarter.

Merchandise trade imbalances widened in 2024, global trade imbalances returned to 2022 levels.

The US trade deficit with China reached -$355 billion, widening by $14 billion in the fourth quarter, while its deficit with the European Union (EU) increased by $12 billion to -$241 billion.

Meanwhile, China’s strong exports pushed its trade surplus to the highest level since 2022.

The EU reversed previous deficits and posted a trade surplus for the year, helped by high energy prices.

Trade has remained stable in early 2025, but mounting geoeconomic tensions, protectionist policies and trade disputes signal likely disruptions ahead. 

Falling shipping indexes signal weaker demand for manufactured goods, input and commodities as businesses adjust to increasing uncertainty.

The challenge in 2025 is to prevent global fragmentation, where nations form isolated trade blocs, while managing policy shifts without undermining long-term growth, UNCTAD stated.

Meanwhile, global debt surged by about 50 per cent over the last decade, outpacing a 46 per cent increase in global gross domestic product (GDP).

From the end of 2015 to the end of 2024, global debt rose by 49.2 per cent, from $213.3 trillion to $318.4 trillion, an additional $105 trillion, data from the International Institute of Finance (IIF) shows.

Over the last 10 years, global GDP increased by approximately $35 trillion, reaching $110 trillion, according to the International Monetary Fund (IMF).

In other words, global debt now exceeds the world’s GDP by three times.

During the same 10-year period, household debt rose by 50 per cent to $60.1 trillion, while debt for non-financial companies grew by 45 per cent to $91.3 trillion.

Financial firms saw the smallest increase at 33.4 per cent, reaching a total of $71.4 trillion.

However, government debt surged by 67.7 per cent, rising from $56.8 trillion at the end of 2015 to $95.3 trillion by the end of 2024.

Mature markets’ debt soared by 34.3 per cent to $214.3 trillion as of the end of 2024, and emerging markets’ debt jumped by 92.7 per cent to $103.7 trillion.

As for GDP, advanced economies saw a 41.7 per cent increase, while emerging markets and developing economies posted a 53.2 per cent rise.

The most impactful developments in the span of the past decade were the measures introduced to ease the severe economic effects of the COVID-19 pandemic.

According to the IMF, while global GDP narrowed by around 2.5 per cent year-on-year in 2020, global debt rose by 13 per cent over the same period, reaching $291.2 trillion

Since the World Health Organization declared the pandemic in January 2020, global debt has increased by 23.2%, from $258.4 trillion to $318.4 trillion, according to IIF data.

Over the same period, global GDP expanded by about 26 per cent, IMF figures showed.

The US’ total debt stood at $97.83 trillion at the end of 2024, rising by 62.5 per cent over the past decade.

This means the US is responsible for around a third of global debt.

During the same period, the world’s largest economy, the US, grew by 58.4 per cent, which was less than the debt increase.

As for the euro area, total debt rose 22 per cent to $54.5 trillion by the end of 2024.

The eurozone economy expanded by 38.5 per cent in the 10-year period, growing faster than debt figures.

The UK’s debt increased by 12.5 per cent over the past decade, while its GDP grew by 22.5 per cent.

Russia’s debt totaled $2.6 trillion as of the end of 2024, rising by 67.7 per cent, while the Russian economy grew by 60.3 per cent.

China’s debt figures rose by 123.4 per cent to $62.4 trillion over the same period, while its GDP expanded by 64.5 per cent, about half the rate of its debt growth.

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