China’s exports likely grew more quickly and for a second month in December, a Reuters poll showed, adding to signs global trade is starting to recover thanks to an upturn in the electronics industry and expectations of lower borrowing costs in 2024.

Outbound shipments from the world’s second-largest economy are expected to have risen 1.7% in December from a year earlier, after ending a six-month slump and growing 0.5% in November, according to the median forecast of 32 economists polled.

Global trade slowed in 2023 as higher interest rates in the United States, Europe and other major consumer markets crimped demand.

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The United Nations warned trade in goods likely contracted by nearly $2 trillion or 8% last year. But improving Chinese, South Korean and German export data suggests conditions are slowly turning a corner.

South Korea’s exports, a closely watched indicator of global trade, rose for a third month in December, while the latest German export data for November surprised on the upside, increasing 3.7% month-on-month.

Analysts also anticipate that interest rates will drop at least 1.5 percentage points in the United States and Europe this year, which should improve demand for imported goods.

An employee is seen taking notes at a Shanghai Free Trade Zone port on Feb. 11, 2014. (REUTERS/Aly Song/File Photo)

“There’s increasing evidence that a cyclical upturn in the global electronics sector is driving a bottoming-out of global trade,” said Xu Tianchen, senior economist at the Economist Intelligence Unit, noting better-than-expected growth in Taiwan’s export data for December, buoyed by stronger demand for high-tech products from the United States.

“This gives us reason for optimism about a rosier trade picture in 2024,” he added.

China’s trade data, which will be released on Friday, is also expected to show imports grew by 0.3% last month, after dropping 0.6% in November.

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But South Korean exports to the Asian giant, a leading indicator of China’s imports, declined 2.9% on the year in December, as did outbound shipments from Taiwan, which fell 6.4% year-on-year. German exports to China grew 3.1% in November compared with a month earlier.

In its December Global Trade Update, the United Nations Conference on Trade and Development said the forecast for global trade in 2024 remained “highly certain and generally pessimistic.”

Global trade activities, represented by the Baltic Dry Index, fell 7.3% to its lowest since Nov. 23 on Tuesday, reflecting the challenges facing shipping companies, including attacks by Iran-aligned Houthi militants on container ships in the Red Sea.

The median estimate in the poll indicated that China’s trade surplus would increase, with analysts predicting it will come in at $74.8 billion, compared with $68.4 billion in November.