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‘Picture for 2023 has darkened considerably’, says WTO while slashing global trade forecast

Nigeria's Ngozi Okonjo-Iweala, Director General of the World Trade Organisation, WTO, speaks to the media about WTO revised trade forecast during a press conference, at the headquarters of the World Trade Organization in Geneva, Switzerland, Wednesday, Oct. 5, 2022. (Martial Trezzini/Keystone via AP) (AP)Premium
Nigeria's Ngozi Okonjo-Iweala, Director General of the World Trade Organisation, WTO, speaks to the media about WTO revised trade forecast during a press conference, at the headquarters of the World Trade Organization in Geneva, Switzerland, Wednesday, Oct. 5, 2022. (Martial Trezzini/Keystone via AP) (AP)

WTO predicted that it would expand by just 1% in 2023, which is significantly less than their previous projection of 3.4% growth.

In light of Russia's conflict in Ukraine and other shocks to the global economy, the World Trade Organization (WTO) on October 5 sharply cut its global trade prediction for 2023. WTO experts revised their yearly trade forecast, noting that they now expected the world's merchandise trade to grow by 3.5 percent this year, which is a bit more than they had forecasted in April.

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However, they predicted that it would expand by just 1% in 2023, which is significantly less than their previous projection of 3.4% growth.

Since Russia's full-scale war in Ukraine had just begun a few weeks prior, the WTO noted that its April projections were extremely speculative. The estimates for 2023 "now appear overly optimistic, as energy prices have skyrocketed, inflation has become more broad-based, and the war shows no sign of letting up," it said.

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"The picture for 2023 has darkened considerably," WTO Director-General Ngozi Okonjo-Iweala told reporters in Geneva. "Today the global economy faces multi-prong crises. Monetary tightening is weighing on growth across much of the world."

Rising energy costs in Europe as a result of the conflict in Ukraine, according to the WTO, are anticipated to reduce household expenditure and increase industry expenses.

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In the meantime, as China continued to struggle with Covid-19 breakouts and production disruptions, monetary policy tightening in the United States was having an impact on the housing, automobile, and fixed investment sectors.

WTO economists maintained their April projection of 2.8% GDP growth for the world's economy as a whole, but they stated that growth in 2023 was now likely to be just 2.3% — down a whole percentage point from the prior forecast.

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Comparatively, the Organization for Economic Cooperation and Development has kept its 2022 prediction at three percent and anticipates growth of 2.2 percent in 2023. While doing so, the IMF predicts growth of 3.2% this year and 2.9% in 2023.

(With agency inputs)

ABOUT THE AUTHOR

Sounak Mukhopadhyay

Sounak Mukhopadhyay, who also goes by the name Sounak Mukherjee, has been producing digital news since 2012. He's worked for the International Business Times, The Inquisitr, and Moneycontrol in the past. He's also contributed to Free Press Journal and TheRichest with feature articles. He covers news for a wide range of subjects including business, finance, economy, politics and social media. Before working with digital news publications, he worked as a freelance content writer.
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