WTO Raises 2026 Merchandise Trade Growth Forecast to 3.9% Amid Middle East Tensions

The WTO's upgraded forecast signals a robust recovery in global merchandise trade, highlighting the resilience of supply chains amid ongoing conflicts.

• WTO upgraded its 2026 merchandise trade growth forecast to 3.9%, up from 1.9% in March.
• AI-enabling goods surged 67% year-on-year, contributing 47% of total merchandise trade growth value.
• Services trade outlook was downgraded to 3.3% due to rising energy costs impacting transport and travel.

• Geopolitical tensions in the Middle East, particularly the US-Israeli conflict with Iran, had previously dampened trade expectations.
• AI infrastructure investments have accelerated since 2024, creating demand for specialized hardware and enhancing supply chain resilience.
• Merchandise trade volumes grew 3.5% year-on-year in the first half of 2026, exceeding earlier forecasts.

The World Trade Organization (WTO) recently released its Global Trade Outlook and Statistics report, significantly revising its forecast for global merchandise trade growth in 2026 from 1.9% to 3.9%. This upward adjustment is largely attributed to the burgeoning demand for AI-enabling goods, such as semiconductors and servers, which have become critical components in various industries. In the first half of 2026, trade in these AI-related products surged by an impressive 67% year-on-year, accounting for nearly half (47%) of the total merchandise trade growth value.

This resilience comes despite the backdrop of geopolitical instability, particularly the ongoing US-Israeli conflict with Iran, which has disrupted energy markets and affected sectors like aviation and travel. The conflict has led to increased energy costs, which in turn has downgraded the services trade outlook to 3.3%. However, the flexibility of global supply chains, bolstered by a rules-based trading system, has mitigated some of the adverse impacts of these geopolitical tensions.

The report also highlights that investments in AI infrastructure have been a game-changer for global trade dynamics. Since 2024, there has been a marked increase in global investment in AI technologies, which has not only driven demand for specialized hardware but also prompted adaptations in supply chains that enhance their resilience. As a result, the WTO has projected that this momentum will continue, with merchandise trade growth expected to reach 4.1% in 2027.

WTO officials, including Director-General Ngozi Okonjo-Iweala and Chief Economist Robert Staiger, emphasized the importance of integrated supply chains and the role of Asia in driving growth through AI investments. Markets have responded with cautious optimism, reflected in stable container throughput, although no immediate major policy shifts have been reported. The emphasis on diversified AI supply chains is a notable trend in the commentary surrounding the report.

• Manufacturers of AI-enabling goods will see increased orders and production demands.
• Logistics companies may experience shifts in shipping patterns due to changing trade flows.
• Energy sectors could face challenges from rising costs impacting transport and travel services.
• Investors in technology and AI sectors will likely benefit from heightened demand and growth opportunities.

• AI investment trends: Continued growth in AI infrastructure investments will be crucial for sustaining trade momentum.
• Geopolitical developments: Any escalation in Middle East conflicts could impact trade flows and energy costs.
• Supply chain adaptations: Watch for innovations in supply chain management that enhance resilience against geopolitical disruptions.