The global uncertainties are likely to impact economic activities significantly, World Trade Organization (WTO) said on Wednesday and predicted the growth in world trade to increase by merely 1.7 percent in 2023.
This estimate is higher than the previous prediction of 1 percent made in October of last year.
However, WTO forecasts that trade growth is expected to recover to 3.2 percent in 2024.
This estimate is more uncertain than usual due to the existence of significant downside risks, such as geopolitical tensions, disruptions in food supply, and the potential for unexpected consequences from monetary tightening, the organisation cautioned.
“Global trade growth in 2023 is still expected to be subpar despite a slight upgrade to GDP projections since last fall.
“Weighed down by the effects of the war in Ukraine, stubbornly high inflation, tighter monetary policy and financial market uncertainty, the volume of world merchandise trade is expected to grow by 1.7 percent this year, following 2.7 percent growth in 2022,” the WTO said in a statement.
According to WTO Director-General Ngozi Okonjo-Iweala, trade remains a source of resilience for the global economy, despite facing pressure from external factors in 2023.
Therefore, she underscored, it is crucial that governments should avoid trade fragmentation and refrain from creating obstructions to trade.
The World Trade Organization (WTO) had predicted a 3.5 percent growth in world trade volume for 2022 in October of that year, but the actual increase was only 2.7 percent.
The WTO revised its forecast for 2023 from 1 percent to 1.7 percent due to various factors, including the easing of COVID-19 pandemic restrictions in China, which is expected to stimulate consumer demand and boost international trade.
