BY THEPHILIZNEWS STAFF
The World Trade Organization (WTO) has upgraded its forecast for world merchandise trade, now projecting a 0.9% expansion in 2025 instead of the previously expected -0.2% contraction, with Asian economies expected to remain the key growth driver.
The revision is largely attributed to frontloaded imports in the United States ahead of anticipated tariff hikes, WTO economists said in a forecast update released this month. The new outlook, however, remains weaker than the 2.7% growth forecast issued before U.S. reciprocal tariffs were announced.
“Global trade has shown resilience in the face of persistent shocks, including recent tariff hikes. Frontloaded imports and improved macroeconomic conditions have provided a modest lift to the 2025 outlook,” said WTO Director-General Ngozi Okonjo-Iweala.
WTO economists cautioned that the momentum is temporary, with tariffs expected to dampen trade in the second half of 2025 and into 2026. The organization now projects trade growth of 1.8% in 2026, down from 2.5% previously.
The more favorable global environment — supported by a weaker U.S. dollar, falling oil prices, and stronger-than-expected manufacturing activity — also contributed to the improved short-term outlook. However, these gains are expected to be offset by escalating trade tensions.
By region, Asia will continue to be the largest positive driver, with exports projected to grow 4.9% in 2025 before slowing sharply to 1.3% in 2026. North America is expected to have a negative impact on trade growth in both years, while Europe’s contribution has turned slightly negative for 2025. Energy-exporting regions are also set to see weaker growth as lower oil prices reduce revenues and demand.
For the Philippines, the WTO outlook signals both opportunity and risk. Stronger Asian exports may support demand for Philippine electronics, semiconductors, and services, which are deeply tied to regional supply chains. However, rising tariff barriers and geopolitical tensions could disrupt trade routes and increase costs for exporters and import-dependent businesses.
Okonjo-Iweala warned that uncertainty remains the most disruptive force in trade: “The shadow of tariff uncertainty continues to weigh heavily on business confidence, investment and supply chains.”
