Global trade may grow 1.7% in 2023 despite war: WTO
Trade growth should rebound to 3.2% in 2024 as GDP growth picks up to 2.6%, but this estimate is more uncertain than usual due to the presence of substantial downside risks, including rising geopolitical tensions and global food insecurity, the trade body said.
New Delhi: The world trade organization (WTO) on Wednesday revised its global trade growth outlook for 2023 upwards to 1.7% from last October’s estimate of 1% even as the war in Ukraine, stubbornly high inflation, tighter monetary policy and financial uncertainty continue to be a worry.
The projected growth rate for the current year is much below the average rate for the 12 years since the trade collapse that followed the global financial crisis.
“The outlook for the global economy has slightly improved since the WTO’s most recent trade forecast was issued in October of last year but the pace of trade expansion in 2023 is still expected to be subpar, weighed down by the ongoing war in Ukraine, stubbornly high inflation, tighter monetary policy and financial uncertainty,” WTO said in a statement.
Trade growth should rebound to 3.2% in 2024 as GDP growth picks up to 2.6%, but this estimate is more uncertain than usual due to the presence of substantial downside risks, including rising geopolitical tensions and global food insecurity, the trade body said.
Cautioning governments and regulators about financial risks in the coming months, WTO said recent bank failures in the US and Europe highlight possible further vulnerabilities stemming from a changed interest rate environment.
“Reversing course on low interest rates was never going to be easy, and the road ahead is likely to be bumpy. Upside surprises in inflation could raise the prospect of bigger rate hikes but these would come at the risk of broader financial contagion that would reduce output and trade,” WTO said.
North America is expected to record the strongest merchandise export growth of any WTO region in 2023 (3.3%), followed by the CIS (2.8%), Asia (2.5%) and Europe (1.8%).
Weaker export growth is expected in West Asia (0.9%) and South America (0.3%) while Africa’s goods exports are expected to decline (-1.4%).
“Europe’s expected GDP growth has been revised up by 0.7 percentage points while Asia’s has been revised down by 0.4 points,” WTO added.
Catch all the Business News , Economy news , Breaking News Events andLatest News Updates on Live Mint. Download TheMint News App to get Daily Market Updates.
Business NewsEconomyGlobal trade may grow 1.7% in 2023 despite war: WTO
First Published:5 Apr 2023, 11:32 PM IST
- Top Gainers
- Top Losers
- 52 Week High