WTO Raises Global Trade Forecast as AI Boom Offsets Middle East Disruptions

The World Trade Organization has upgraded its forecast for global merchandise trade growth in 2026 to 3.9%, more than double its previous estimate of 1.9%. The stronger outlook reflects robust demand for semiconductors and AI data centres, which has helped offset disruptions caused by the US-Israeli war with Iran and wider tensions in the Middle East. The WTO expects merchandise trade growth to reach 4.1% in 2027, compared with 4.2% in 2025.

AI-related goods have emerged as a major driver of global trade, with trade in semiconductors and other AI-enabling products rising 67% year-on-year. AI-enabling goods accounted for 47% of global merchandise trade growth in the first half of 2026. Asia is expected to lead merchandise trade growth, with imports rising 9.5% and exports 9.9%. However, the WTO cut its 2026 services trade growth forecast to 3.3% from 4.8%, citing higher aviation fuel costs and disruptions affecting transport and travel.

The WTO also warned that risks remain, including higher fuel and fertiliser costs, disruptions around the Strait of Hormuz, the war in Ukraine and a potential slowdown in AI investment. Global GDP is projected to grow 2.6% in 2026, led by Asia at 4.3%, while Middle East output is expected to contract 4%. The report also highlighted growing US-China trade decoupling, with US imports from China falling 29% in 2025 and China’s share of total US imports declining to 9.3% from more than 20% before trade tensions intensified in 2018.

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