A surging artificial intelligence investment boom has helped global goods trade withstand the economic fallout from the Middle East conflict, prompting the World Trade Organization (WTO) to more than double its forecast for merchandise trade growth this year.
The Geneva-based international trade body now expects global merchandise trade volumes to grow 3.9 per cent in 2026, up sharply from its March forecast of 1.9 per cent. It is projected to accelerate slightly to 4.1 per cent in 2027.
Global gross domestic product (GDP) is forecast to expand 2.6 per cent this year and 2.9 per cent next year, according to the WTO’s latest Global Trade Outlook and Statistics released on Thursday (Oct 8).
But the headline numbers mask an uneven picture, with much of the strength concentrated in AI-related products and Asian economies, while the rest of the world remains considerably weaker.
“Asia is, in some sense, the story of global trade growth at the moment, because global trade growth is really being driven by the AI investment boom,” WTO chief economist Robert Staiger told CNA.
Demand for AI-enabling products such as semiconductors and servers accounted for 47 per cent of global merchandise trade growth in the first half of 2026, according to the WTO.
Staiger said the AI boom, which had rapidly gathered pace in the past two years, had defied expectations that it might moderate in 2026.
“In fact, it has accelerated,” he said.
TRADE RESILIENT TO MIDEAST SHOCK
Merchandise trade volumes grew a stronger-than-expected 3.5 per cent in the first half of the year, despite disruptions caused by the Middle East conflict.
The WTO said global trade proved more resilient than expected, as economies and supply chains adapted to energy and transport disruptions and kept essential products flowing.
Middle Eastern crude oil exports fell about 24 per cent in the first half, while liquefied natural gas (LNG) exports plunged 47 per cent. But alternative suppliers limited the decline in global exports to around 6 per cent for crude oil and just 1 per cent for LNG.
Fertiliser markets also adjusted despite severe disruptions, while trade flows were rerouted through alternative ports and corridors.
“Supply chains have been quite resilient globally to the elevated energy shocks,” Staiger said.
“Demand adjustments as well as strategic reserve releases have also mitigated the global trade effects of the Middle East crisis relative to what we would have expected.”
But that resilience has not been felt equally across the global economy.
The WTO downgraded its forecast for commercial services trade volume growth to 3.3 per cent this year from 4.8 per cent in March, as the conflict weighed on transport and travel.
International tourist arrivals fell 0.8 per cent year-on-year in the second quarter, while travellers’ spending abroad grew just 5 per cent, down from 15 per cent in the first quarter.
Services trade growth is expected to rebound to 6.4 per cent next year.
WTO Director-General Ngozi Okonjo-Iweala said the latest figures showed “trade resilience in action” but cautioned that the benefits have been uneven.
“Some have felt the shock more than others, and not everyone can access emerging opportunities like AI,” she said.
ASIA ACCOUNTS FOR OVER 100% OF GROWTH
Nowhere is the unevenness more apparent than in Asia, which is expected to be the largest contributor to world merchandise trade growth for a third consecutive year.
The WTO outlook forecasts Asian economies to contribute 4.0 percentage points to the 3.9 per cent increase in global merchandise trade volumes this year – effectively accounting for more than 100 per cent of the total growth.
“What this reflects is: All of the rest of the world taken together would actually have a slight decline in their trade for 2026,” said Staiger.
“(Asia) is keeping the world at a very, very high level of growth … because Asia is where much of the world’s AI hardware is produced.”
Asia’s merchandise exports are forecast to surge 9.9 per cent this year, the fastest growth of any region. North American exports are expected to rise 5.7 per cent and African exports 5.6 per cent.
By contrast, European exports are forecast to dip 0.1 per cent, while exports from the Middle East are expected to plunge 17.2 per cent amid the ongoing conflict and associated disruptions.
“AI activity is very concentrated in a smallish number of sectors, countries and regions. In fact, the 10 most active economies in AI, they account for 80 per cent of AI trade,” said Staiger.
“And so, the global trade growth in merchandise trade that’s very strong does not necessarily translate to all regions.”
AI TRADE SURGES
Underpinning Asia’s outperformance is a rapid expansion in trade in AI-enabling goods, which has outpaced the rest of merchandise trade since 2024, according to the WTO report.
Trade in such products grew 16 per cent in 2024 and 31 per cent in 2025, before soaring 67 per cent year-on-year in the first half of 2026.
That expansion has nearly doubled AI-enabling goods’ share of world merchandise trade, from 8 per cent to 14.8 per cent, with the sector accounting for roughly 40 to 50 per cent of merchandise trade growth.
The boom is highly concentrated in Asia. East Asian economies, including China, supply more than half of global exports of AI-enabling goods, while Southeast Asia provides about another quarter.
“Southeast Asia has a very strong revealed comparative advantage in AI-related products,” said Staiger, pointing to the region’s roles in the AI supply chain as a manufacturing base and as a connector linking different stages of production.
AI-related investment is expected to remain a major driver of merchandise trade into 2027.
Global spending on AI infrastructure is projected to rise by at least 30 per cent this year, with current market projections pointing to a further increase of between 10 and 20 per cent next year.
If not for AI, Staiger said the picture would look considerably weaker.
“Without AI growth, there would be a dramatic reduction in our forecast of trade growth in all regions,” he said.