Global Services Trade Growth Slows in Q1 2025, with AI-Driven Computer Services Showing Resilience

Global Services Trade Experiences Slowdown

The World Trade Organization (WTO) has reported a significant deceleration in global services trade growth for the first quarter of 2025. The growth rate dropped to 5% year-on-year, approximately half the pace recorded in both 2024 and 2023 1

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. This slowdown has been attributed to various factors, including increased global economic uncertainty and exchange rate fluctuations, particularly the appreciation of the US dollar against the euro and other currencies 4

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Regional Disparities in Growth

The slowdown was not uniform across all regions. Europe and North America experienced a sharp decline in services exports growth, with both regions recording only a 3% year-on-year increase in the first quarter of 2025, down from 8% and 11% respectively in the same period of 2024 1

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. In contrast, Asia maintained strong growth at 9%, with several Asian economies posting double-digit export growth 1

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Sector-Specific Performance

Other Commercial Services

The category of "Other commercial services," which includes a wide range of digitally deliverable services from financial to professional services, was the main contributor to the overall slowdown. This sector accounted for approximately 60% of global services trade in 2024, with Europe contributing 40% of those exports 1

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Computer Services and AI

Despite the broader slowdown, computer services exports showed resilience, largely due to strong global demand for artificial intelligence (AI), digital transformation, and cybersecurity solutions. This sector's growth is expected to continue, driven by ongoing business adaptation to new technologies and increasing consumer preferences for digital services 1

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India's computer services exports grew by 13%, while Ireland recorded a 9% increase during this period 1

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. The momentum in this sector is anticipated to persist, supported by the continued integration of AI and other advanced technologies into business operations.

Other Sector Performances

• Financial services exports grew by only 3% year-on-year, reflecting reduced investment activity amid increased global economic uncertainty 1

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• Intellectual property-related services expanded by 4% year-on-year, down from 7% growth in the same quarter of 2024 1

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• Global construction exports fell by 15% year-on-year, reversing part of the strong 25% growth recorded during the same period in 2024 1

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• Global transport exports were up 3% year-on-year, with Asia recording the fastest growth at 10% 1

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• International travel expanded by 5% year-on-year, with international tourist arrivals 3% above 2019 levels for the first time since the pandemic 1

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Country-Specific Trends

In the first five months of 2025, services trade performance varied across major traders. Asian economies such as China (+13%), India (+12%), and Japan (+11%) recorded double-digit export growth 1

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. In North America, the United States saw a 5% increase in service exports, while Canada experienced a 6% decline 1

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The European Union's service exports to non-member countries rose by 3%, while imports from outside the Union grew more sharply, increasing by 6%. The United Kingdom recorded marked growth, with exports up 9% and imports rising by 13% 1

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This data underscores the complex and varied landscape of global services trade, highlighting the resilience of technology-driven sectors amidst broader economic challenges.