The World Trade Organization (WTO) announced that global merchandise trade growth in volume this year will be just 0.8 %, which represents less than half of the initial April projection of 1.7 %. This drastic slowdown is attributed to rising geopolitical tensions and inflation.
WTO Director-General Ngozi Okonjo-Iweala expressed concern about this slowdown and its impact on global living standards. In a statement, she warned that “the slowdown in trade expected for 2023 is worrying, as it has unfavorable effects on the standard of living of people around the world.”
According to the organization’s report, this slowdown began in the fourth quarter of 2022 and has led to the downward revision of business projections for this year. However, a more positive outlook remains for 2024, with trade growth forecast at 3.3 %, slightly higher than the 3.2 % previously forecast. Regarding real GDP, stable growth of 2.5 % is expected.
WTO chief economist Ralph Ossa noted that “positive growth in exports and imports should recover in 2024, but we must remain vigilant.”
The slowdown in merchandise trade affects numerous countries and sectors, including iron, steel, office and telecommunications equipment, textiles and clothing.
Despite the challenging outlook for this year, the WTO remains cautiously optimistic for 2024. However, it continues to warn of the potential negative impact of a split of global trade into two geopolitical blocs in the wake of Russia’s invasion of Ukraine. The director general of the WTO urges strengthening the global trading environment and avoid protectionism to avoid a “fragmentation of the global economy.”
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