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Global trade grew by about 4% in the first quarter of 2026, with goods trade rising 4.8% and services trade up 1.6%, UNCTAD said.
The UN agency said much of the increase reflected higher prices, driven by energy, transport, logistics and production costs.
East Asia led the growth, with the Republic of Korea and China posting the strongest gains among major economies.
Demand for AI-related products, semiconductors, batteries, critical minerals and electric vehicles is expected to support trade through the second half of 2026.
Global trade grew by about 4 per cent in the first quarter of 2026, despite geopolitical tensions and concerns over supply chains, according to a United Nations report.
Goods trade rose by 4.8 per cent quarter on quarter, while services trade grew by 1.6 per cent, the latest Global Trade Update by the United Nations Trade and Development (UNCTAD) agency said. UNCTAD’s nowcast suggests trade will grow further in the second quarter, particularly in goods. But the agency said much of the increase reflects higher prices rather than stronger trade volumes.
It attributed the rise in trade inflation during the first half of 2026 to higher energy, transport, logistics and production costs. The report said global trade continues to face uncertainty from geopolitical tensions, shifting trade policies and supply chain disruptions.
The outlook comes amid heightened uncertainty following the conflict involving the United States, Israel and Iran, which renewed concerns over global supply chains and energy security. Although active hostilities have eased, tensions continue to pose risks to shipping through the Strait of Hormuz, a critical route for global oil and liquefied natural gas trade.
UNCTAD said disruptions to logistics, shipping routes and supply chains, combined with higher transport and energy costs, could weigh on global trade, business confidence, investment and economic growth, while adding to inflationary pressure and trade fragmentation.
East Asia was the main driver of global trade growth in the first quarter, with China and the Republic of Korea posting the strongest gains in goods trade, the report said. Developing economies and South-South trade recorded double-digit growth over the past 12 months when East Asian economies were included.
But when East Asia was excluded, developing economies as a group saw goods trade contract, mainly because of lower imports and exports from the West Asia and South Asia. Among major economies, the Republic of Korea recorded the highest quarterly export growth, at 20 per cent, followed by China at 11 per cent. China’s imports grew by 13 per cent, the strongest increase among major economies.
India’s goods exports fell by 8 per cent quarter on quarter, while imports declined by 1 per cent. Regionally, East Asia recorded double-digit quarterly growth in goods trade, while Africa and Europe saw strong import growth over the past 12 months.
UNCTAD said demand for artificial intelligence-related products, semiconductors, batteries, critical minerals and electric vehicles is expected to remain a key driver of trade growth through the second half of 2026.
In the first quarter, trade in critical minerals recorded the fastest growth, at 38 per cent. Semiconductors grew by 25 per cent, electronics by 18 per cent, batteries by 15 per cent, information and communication technology products by 14 per cent and electric cars by 11 per cent.
Hybrid vehicles also continued to perform strongly. By contrast, trade in solar- and wind-related products contracted during the quarter, while fossil fuel trade remained positive because of higher prices.
At the wider manufacturing level, trade in electrical machinery grew by 13 per cent, machinery by 8 per cent and other base metals by 13 per cent. Trade in chemical products and iron and steel contracted. Minerals grew by 22 per cent, supported by strong demand and higher prices.
UNCTAD said the short-term outlook remains shaped by geopolitical developments, particularly tensions in the West Asia, risks to shipping through the Strait of Hormuz and continuing geoeconomic fragmentation.
These factors are expected to raise trade costs, disrupt logistics and contribute to uneven trade performance across regions and sectors.
The report also identified high public debt, fiscal constraints, uncertain monetary easing, export controls, industrial policies and supply chain diversification as factors likely to influence global trade in the coming months.
At the same time, investment in resilient supply chains, growth in digital and green industries, and the emergence of new manufacturing and logistics hubs could create new trade opportunities, the agency said.
India’s goods exports declined by 8 per cent quarter on quarter in the first quarter of 2026, while goods imports fell by 1 per cent, according to UNCTAD estimates based on national statistics. Services imports also fell by 5 per cent, although services exports rose by 1 per cent during the quarter.
Over the previous four quarters, India’s services exports increased by 9 per cent, the report said.