WTO: world trade to grow 2.7 % in 2024 and 3 % in 2025

The World Trade Organization established the projections for world trade growth for 2024 and 2025, placing them at 2.7 % and 3 %, respectively.

According to the international institution, it has established the estimates taking into account destabilizing factors such as the increase in geopolitical tensions and economic policies, in addition to inflation and the reduction of interest rates in the different regions.

“World merchandise trade is set to rise by 2.7 % this year, after a 1.1 % decline in 2023, which would mean a recovery pace slightly higher than the 2.6 % projected last April by the World Trade Organization (WTO).”

On inflation, a factor that increases distrust in the world’s economies, the WTO stresses that by mid-2024 it had fallen enough “to allow central banks to begin lowering interest rates, adding that lower inflation should increase household real income and encourage consumer spending, while lower interest rates should increase business investment.”

However, it is forward-looking and warns that “divergent monetary policies among major economies could lead to financial volatility and changes in capital flows, as central banks reduce interest rates, which could make debt service more difficult, particularly for poorer economies.”

The organization is optimistic but alert, according to the director general of the WTO, Ngozi Okonjo-Iweala, regarding possible setbacks that may arise from the worsening of regional wars, such as those in the Middle East.

She stressed that since the creation of the organization, three decades ago, per capita income in middle- and low-income economies has almost tripled, so in her opinion it is necessary to continue “working collectively to guarantee global economic stability and sustained growth, since they are essential to improve the well-being of people around the world.”

The WTO has detailed that the short-ter short-t m outlook for trade in services is more positive than for goods, “with an 8 % year-on-year growth in dollars in trade in commercial services during the first quarter of 2024.”

M.Pino

Source: americaeconomia

(Reference image source: Amira El Fohail en Unsplash)

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