World merchandise trade growth exceeded expectations in the first quarter of 2026 as surging trade in electronic components related to artificial intelligence (AI) offset the negative impact of the conflict in the Middle East, which began in the final month of the quarter. Trade disruptions in the Strait of Hormuz are expected to be more fully captured in trade data for the next quarter.
The seasonally adjusted volume of world merchandise trade grew 1.9% in the first quarter compared to the previous quarter and 3.2% compared to the same quarter in the previous year according to recent WTO/UNCTAD data (downloadable from stats.wto.org). In value terms, world merchandise trade was up 2% quarter-on-quarter and 11% year-on-year in the first quarter.
The pace of year-on-year growth in the first quarter of 2026 was particularly impressive considering that trade in the first quarter of 2025 was boosted by the frontloading of imports in North America ahead of expected tariff hikes. Strong trade in electronic components related to AI outweighed the negative effects of the outbreak of war in the Middle East, including disrupted shipments of goods through the Strait of Hormuz and dampened GDP growth in net fuel-importing countries due to higher energy prices. Figures on world trade in AI-enabling goods are not available in quantity terms, but the US dollar value of this trade was up more than 40% year-on-year in the first quarter.
The WTO’s most recent trade forecast, issued in the Global Trade Outlook and Statistics (GTOS) report from last March, predicted 1.9% growth in the volume of world merchandise trade in 2026 under a baseline scenario, less than the 3.2% increase recorded for the first quarter. The report estimated that the Middle East war could shave 0.5 percentage points off world trade growth in a high energy price scenario, but that continued strong AI-related investment could add 0.5 percentage points to growth.
These estimates were produced very early in the conflict, with only partial information on the extent of shipping disruptions in the Strait of Hormuz. Considering subsequent developments, WTO economists expect to see larger contractions in Middle East trade flows by the end of the year together with stronger growth in Asia and North America. The global impact, meanwhile, will depend on whether it will be the AI boom or the Middle East conflict that predominates. The next GTOS report, including an updated trade forecast, will be issued in October.
Merchandise trade volume by region
The conflict has weighed heavily on merchandise trade flows of the Middle East. The region’s seasonally adjusted export and import volumes were down 9.7% and 11.9% year-on-year in the first quarter, with larger contractions expected in the second quarter. The impact of the conflict on trade was only seen towards the end of the first quarter. WTO Secretariat estimates based on available reporting countries show the volume of world crude oil imports from the Middle East down roughly 45% year-on-year in March. Similarly, imports of Liquefied Natural Gas (LNG) and fertilizers from the region were down 52% and 26%, respectively, over the same period.
| The Strait of Hormuz has been effectively closed since early March following the outbreak of war in the Persian Gulf. The resulting disruption in maritime transport would only be partly reflected in merchandise trade statistics for the first quarter of 2026. While exports and imports of Gulf states were immediately affected by the conflict, merchandise trade statistics for these countries are extremely limited, with few publishing quarterly trade data. Regional trade flows are therefore largely estimated from partner countries’ mirror statistics. Even the data for March probably also underestimate the extent of the trade disruption, since they primarily capture shipments that already departed before the start of the war. More generally, March import and export statistics for economies outside the Persian Gulf region would likewise show a modest impact from the disruption. Consequently, the effects of the Strait of Hormuz disruption on world merchandise trade is expected to become visible primarily in data from April 2026 onward… Source: WTO |
