WTO upgrades goods trade forecast as AI boom offsets Middle East disruption

AI demand drives stronger-than-expected goods trade despite Middle East conflict The World Trade Organization upgraded its forecast for global merchandise trade growth on Thursday, saying demand for AI-related products had helped offset the impact of disruptions caused by the US-Israeli war with Iran. World merchandise trade volume growth was stronger than expected and is now projected to reach 3.9% in 2026, up from 1.9% in the WTO's baseline forecast issued in March.

It expects 4.1% growth in 2027, up from a previous forecast of 2.6%, and marginally below 2025 trade volume growth of 4.2%. A surge in spending on semiconductors and AI data centres provided a significant boost, with trade in those products jumping 67% from a year earlier, the report said.

However, the Geneva-based trade watchdog downgraded its outlook for services trade to 3.3% in 2026, down from a previous baseline forecast of 4.8%, due to higher aviation fuel costs linked to the conflict in the Middle East. Growth forecasts this year for transport and travel services, both of which rely heavily on the region, were also cut to 0.9% and 0.2%, respectively.