The growth of World Trade will be much lower than forecasts for this year at a time when runaway inflation, high interest rates and the crisis in Ukraine are putting pressure on economies around the world, the World Trade Organization said today.
Pressures in China’s huge real estate market also prompted the WTO to cut its forecast for trade growth to just 0.8 percent this year, less than half the increase it had previously forecast.
“The expected slowdown in trade for 2023 is cause for concern because of the negative repercussions on the standard of living of people around the world,” said FAO Director-General Ngozi Okonjo-Iweala, according to “French”.
According to the updated data, the volume of goods trade in the world is expected to grow this year by 0.8 percent, which is “less than half of the 1.7 percent increase in the April forecast”.
“The 3.3 percent growth projected for 2024 will remain virtually unchanged from previous estimates” of 3.2 percent, it added.
The World Trade Organization expects global real GDP (adjusted for inflation effects) to grow by 2.6 percent at exchange rates this year, and by 2.5 percent in 2024.
“The continuous decline in commodity trade since the last quarter of 2022 has prompted WTO economists to lower their trade forecasts for the current year while maintaining a more positive outlook for 2024,”the report said.
“Positive growth in the volume of exports and imports should resume in 2024, but we must remain vigilant, “said Ralph OSA, chief economist of the organization.
The sectors most affected by business cycles are expected to stabilize and recover as inflation moderates and interest rates begin to fall.
The organization’s forecasts do not cover the commercial services business, but its preliminary data show that growth in this area may be more moderate after the strong recovery in the transport and travel sectors last year.
The slowdown in the growth of goods trade appears to be widespread, affecting a large number of countries and a wide range of goods, although some sectors have been severely affected, such as iron and steel, office supplies, telecommunications, textiles and clothing, according to the WTO.
“The exact reasons for the slowdown are unclear, but inflation, rising interest rates, the value of the US dollar and geopolitical tensions are all contributing factors,”he said.
The crisis in the real estate sector in China prevents a stronger recovery from taking root in this country after the consequences of strict lockdowns associated with the covid pandemic, she said.
