WTO: Trade growth to slow to 1.9% in 2026 but Iran war may weigh more

Growth in world trade in goods will slow down markedly to 1.9% this year from 4.6% in 2025 and could decelerate even more if the Middle East conflict continues to push energy prices higher and disrupt global transport, a World Trade Organization report said on Thursday.

Last year a surge in artificial intelligence-related trade and goods front-loading to avoid a slew of US tariffs enabled a better-than-expected growth performance.

While global trade remains resilient, buoyed by trade in AI-related products, the growth forecast is under pressure from the expanding US-Israeli conflict on Iran, WTO Director-General Ngozi Okonjo-Iweala said.

If crude oil and liquefied natural gas prices remain high throughout 2026 due to the conflict, global trade in goods could slow further to 1.4%, WTO economists said.

By choking one-third of fertilizer urea imports, a prolonged blockade of the Strait of Hormuz risks hitting major producers like India, Thailand and Brazil, the report said, fueling food security risks.

Sustained high energy prices could shave 0.5 percentage points off global merchandise growth, with Asian and European fuel-reliant importers hit hardest.

Services trade also faces a 0.7-point drop from growth forecasts of 4.8% to 4.1% due to shipping and flight disruption, the report found. Last year services trade grew by 5.3%.

Continued AI growth a 'big question mark' 

Last year, world merchandise trade grew at nearly double the forecast rate as a surge in demand for AI-related goods, such as chips and semiconductors, offset the impact of US tariffs and subsequent trade turmoil, the report stated.

Trade in AI-enabling goods accounted for 42% of global trade growth in 2025, despite representing only one-sixth of global trade. It increased by 21.9% year-on-year to $4.18 trillion in 2025, according to the report.

However, the ongoing strength of investment in the sector is "a big question mark for 2026 and beyond," the report said.

This year, goods and services trade and global GDP are forecast to grow at around the same rate – of 2.7% for trade and 2.8% for GDP – following last year's respective growth of 4.7% and 2.9%.

Asia will lead merchandise import growth in 2026 with imports up 3.3% and exports up 3.5%, followed by Africa with 3.2% imports, 1.2% exports, the WTO forecasts. North America will stay flat at 0.3% imports, the report estimates.

Some 72% of world trade is being conducted on a Most-Favored-Nation basis after falling from about 80% at the start of last year when Trump imposed higher import tariffs, WTO economists estimate. MFN requires WTO members to treat others equally.

Okonjo-Iweala said this figure served as a lesson ahead of the WTO's conference in Cameroon next week where trade ministers will meet to discuss reforms to the global trade body, that the rules-based system "may be battered, but it is far from broken."