International trade posted strong growth in the first half of the year, but the expansion was driven partly by higher prices rather than stronger trade volumes and remained uneven across economies and sectors, according to a new report from the United Nations Conference on Trade and Development (UNCTAD).
Global trade grew by about 4 percent quarter-on-quarter in the first quarter of 2026, with goods trade increasing by 4.8 percent and services trade by 1.6 percent, according to UNCTAD’s Global Trade Update. The positive momentum is expected to continue into the second quarter, with preliminary estimates pointing to quarter-on-quarter growth of 6.4 percent for goods and 2.1 percent for services.
Overall, global trade increased by about USD2trillion in the first half of 2026 and is on track to reach a record annual value, the report said.
However, part of this growth reflected higher trade prices rather than stronger trade volumes. Disruptions to shipping through the Strait of Hormuz drove up global energy prices and increased transportation, logistics, and production costs across international supply chains.
Global trade inflation rose sharply to 3.6 percent quarter-on-quarter in the first quarter of 2026, with a further increase to around 5.1 percent is expected in the second quarter.
Over the past 12 months, trade inflation has averaged about 3.4 percent, indicating persistent price pressures across global trade.
Merchandise trade performance in the first quarter remained highly uneven across economies and sectors. East Asia was the main engine of growth, while the rest of Asia experienced slower growth.
China and the Republic of Korea recorded the strongest growth in both exports and imports.
On the export side, Japan, South Africa, and the United States also posted robust growth, while India experienced a sharp decline.
Imports grew in Brazil and Japan, while those in most other major economies remained broadly unchanged from the previous quarter.
Services trade also presented a mixed picture across major economies in the first quarter.
On the import side, India, the Republic of Korea, and the Russian Federation recorded declines, while Brazil and the European Union posted increases.
On the export side, the Republic of Korea, the Russian Federation, and the European Union registered growth in services exports, while Brazil experienced a decline. Services trade in the remaining major economies remained broadly unchanged from the previous quarter.
At the sectoral level, demand for semiconductors, information and communications technology (ICT) products, electrical machinery, batteries, critical minerals, and electric vehicles supported expansion. Chemicals, iron and steel, and some renewable energy products recorded declines.
Looking ahead, UNCTAD expects strong demand for artificial intelligence (AI)-related products, semiconductors, batteries and electric vehicle components to remain a key driver of trade growth in the second half of the year.
At the same time, evolving trade policies and geopolitical developments are expected to play an increasingly significant role in shaping global trade. In the United States, ongoing trade negotiations are likely to keep policy uncertainty elevated, prompting some front-loading of trade ahead of potential policy changes.
More broadly, renewed trade tensions, persistent risks to shipping through the Strait of Hormuz, and continued geoeconomic fragmentation are expected to raise trade costs and contribute to increasingly uneven trade performance across regions and sectors.
