Global Trade Volume Up 3.2 Percent Despite Middle East Conflict

Tashkent, Uzbekistan (UzDaily.uz) — The World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD) reported that the seasonally adjusted physical volume of global merchandise trade grew in the first quarter of 2026 by 1.9 percent compared to the previous quarter and by 3.2 percent compared to the same period last year. In value terms, global merchandise trade increased by 2 percent quarter-on-quarter and by 11 percent year-on-year.

According to the organizations' assessment, annual growth rates in the first quarter were particularly high considering that trade in early 2025 was artificially inflated due to accelerated imports into North America ahead of anticipated tariff increases.

A surge in trade of electronic components related to artificial intelligence offset the negative effects of the conflict in the Middle East, including disruptions to shipping through the Strait of Hormuz and rising energy prices, which slowed economic growth in net fuel-importing countries. The value of global trade in AI-related goods rose by more than 40 percent year-on-year.

The WTO's March forecast, published in the Global Trade Outlook and Statistics report, assumed global merchandise trade volume growth of 1.9 percent in 2026 under the baseline scenario, lower than the actual 3.2 percent recorded in the first quarter.

At that time, the organization's economists allowed that the Middle East conflict could reduce global trade growth rates by 0.5 percentage points under a high energy price scenario, while ongoing investments in AI could add the same amount.

These estimates were made at the earliest stage of the conflict with limited information on the extent of shipping disruptions.

Taking into account further developments, WTO analysts expect a more significant reduction in Middle East trade flows by the end of the year against the backdrop of stronger growth in Asia and North America.

The final impact on global trade will depend on whether the artificial intelligence boom or the consequences of the conflict prevail. An updated forecast will be published in the next report in October.

Regional Trade

The conflict had a noticeable effect on Middle East trade turnover: the region's seasonally adjusted exports and imports contracted in the first quarter by 9.7 percent and 11.9 percent year-on-year, respectively, with a more substantial decline expected in the second quarter.

The full impact of the conflict on statistics manifested only toward the end of the first quarter. The Strait of Hormuz has been effectively closed since early March, and statistical data does not yet fully reflect the scale of shipping disruptions, as Gulf countries rarely publish quarterly trade statistics and regional figures are estimated primarily based on mirror data from partner countries.

According to the WTO Secretariat, the volume of global crude oil imports from the Middle East contracted by about 45 percent year-on-year in March, liquefied natural gas imports fell by 52 percent, and fertilizer imports declined by 26 percent.

At the same time, investment in AI spurred trade volume growth in Asia and, to a lesser extent, in North America.

Asia's seasonally adjusted exports and imports grew by 12.9 percent and 14.6 percent, respectively, compared to the first quarter of 2025, while quarter-on-quarter growth reached 5.5 percent and 7.2 percent. Export growth was driven not only by China, but also by Singapore, the Republic of Korea, Thailand, and Chinese Taipei, largely due to intraregional turnover of AI components.

North American exports in the first quarter grew by 7.0 percent year-on-year, while the region's imports contracted by 10.7 percent compared to the first quarter of 2025, when a surge in imports was recorded ahead of expected tariff hikes. On a quarterly basis, import growth stood at 3.4 percent. European exports fell by 2.6 percent year-on-year, mainly due to early shipments of gold and pharmaceutical products to North America a year earlier, while imports grew by a modest 0.6 percent.

In other regions, quarterly export dynamics were moderate or negative: growth of 0.3 percent in South America, a decline of 2.5 percent in Africa, and a drop of 7.4 percent in CIS countries. Cumulative export growth in South America since early 2023 reached 22.5 percent, second only to Asia at 33.4 percent, while the region's import growth over the same period reached 24.5 percent, trailing only Africa at 25.0 percent. Exports from South America, Africa, and CIS countries are expected to recover in the second quarter as oil producers attempt to compensate for reduced output in the Middle East.

Trade in Value Terms

The most noticeable growth in value terms in the first quarter was recorded in the category of office and telecommunications equipment, which rose 44 percent year-on-year, followed by ores and other minerals at 27 percent and other machinery at 9 percent.

Declines were noted in chemical products, down 6 percent; iron and steel, down 5 percent; and fuels, down 3 percent. Fuel prices changed insignificantly, up 3 percent year-on-year and up 16 percent quarter-on-quarter, while prices for metals and minerals excluding gold and silver increased by 32 percent. The main contribution to the growth of the office and telecommunications equipment sector came from continued demand for AI-related technologies, which saw 42 percent growth in that segment.

Asia showed the largest increase in export value in the first quarter, rising 20 percent year-on-year due to shipments of precious metals and gold, copper, machinery and electrical equipment, and ores, while exports of iron and steel, pharmaceuticals, and clothing declined. Africa took second place with 14 percent growth due to exports of precious metals and gold, copper, fertilizers, and ores, while shipments of cocoa and fuel fell.

South and Central America also grew by 14 percent due to oilseeds, precious metals and gold, meat, fuels, ores, coffee, and tea, while exports of fruit, electrical equipment, and automobiles decreased. Decreases in exports were recorded only in the Middle East and CIS countries, both falling by 1 percent due to the prevalence of fuel in their structure.

On the import side, significant year-on-year growth was shown by Asia at 22 percent and Africa at 15 percent. In Asia, shipments of precious metals, gold, copper, and machinery grew noticeably alongside a slight decline in iron and steel imports, while in Africa, imports of automobiles, machinery, and ships increased while shipments of aircraft and organic chemicals declined.

North American imports contracted the most, dropping 7 percent, primarily due to lower shipments of precious metals, pharmaceuticals, automobiles, and iron and steel products. The value of Middle East imports also fell by 6 percent due to a combination of rising prices and falling physical volumes.

Among the world's five largest exporters, all recorded growth in the first quarter: the Republic of Korea grew by 38.4 percent, Hong Kong (China) by 38.3 percent, the United States by 15.2 percent, China by 14.7 percent, and the European Union by 9.2 percent. Among the five largest importers, only the United States showed a decline at 13.6 percent, while imports into the rest grew: Hong Kong (China) by 44.8 percent, the United Kingdom by 28.0 percent, China by 23.0 percent, and the European Union by 11.4 percent.