The United Nations trade body announced on Monday that global trade is set to contract by 5% in 2023 compared to last year, with a generally bleak outlook for 2024.

In its Global Trade Update, the U.N. Conference on Trade and Development (UNCTAD) projected that commerce this year would amount to approximately $30.7 trillion.

Trade in goods is expected to contract by nearly $2 trillion in 2023, or 8%, but services trade should increase by about $500 billion, or 7%, according to the U.N. body.

UNCTAD attributed this contraction in global trade partly to an underperformance of exports from developing countries.

"Global trade has experienced a decline throughout 2023, primarily influenced by diminished demand in developed nations, underperformance in East Asia economies and a decrease in commodity prices," UNCTAD said.

"These factors collectively contributed to a notable contraction in the goods trade."

UNCTAD said the forecast for global trade in 2024 remained "highly uncertain and generally pessimistic."

"While certain economic indicators hint at potential improvements, persistent geopolitical tensions, high levels of debt and widespread economic fragility are anticipated to exert negative influences on global trade patterns," it said.