Global trade declines, yet regional trade grows

The geopolitical risks will widen the gap between the global North and South, the authors of the Chief Economists Outlook study report. The study was based on surveys of the key global economists in November and December 2023 and was published on the eve of the opening of the World Economic Forum (WEF) in Davos.

As a result of such processes, retail and wholesale trade in consumer goods, energy, financial services, and global tourism will be affected.

According to the IMF, due to trade restrictions, the loss of global production by the end of 2023 may reach 7% and 5% of global trade. Trading within economic blocs is gaining momentum, with a 6.2% increase in the third quarter of 2023, but the receding globalization will lead to an overall contraction in the economies of trading blocs.

At the same time, the fragmentation of economies is simultaneously leading to a revival of industrial policy, the WEF survey suggests. This strategy may lead to new points of economic growth and new industries. According to the survey, 79% of economists believe that in the near future the authorities of the countries will have to choose between maintaining the financial stability and developing the production sector.