NEW YORK : Trade growth is expected to lose momentum in the second half of this year and remain subdued in 2023, as the global economy sustains multiple shocks, such as ripple effects from the war in Ukraine, the latest forecast from the World Trade Organization (WTO) has revealed.
The UN partner agency has cautioned against imposing trade restrictions which would ultimately result in slower growth and lower living standards. Global merchandise trade volume is estimated to grow 3.5 per cent in 2022, or slightly better than the 3.0 per cent anticipated in April. However, volume will slow to 1 per cent next year, a sharp decline from the 3.4 per cent previously estimated.
Ngozi Okonjo-Iweala, the WTO Director-General, said policymakers face “unenviable choices” as they try to find an optimal balance among tackling inflation, maintaining full employment, and advancing important goals such as transitioning to clean energy,
She underscored how trade is a vital tool – both for enhancing the global supply of goods and services, as well as for lowering the cost to achieve net-zero carbon emissions.
WTO said the Middle East will have the strongest export growth of any region this year, 14.6 per cent, followed by Africa, North America, Asia, Europe, and South America. The region also had the fastest trade volume growth on the import side at 11.1 per cent. While the Middle East and Africa should see small declines in exports in 2023, imports will remain strong.
The new forecast, released on Wednesday, revises estimates published in April, or just weeks after the start of the war in Ukraine. At the time, WTO economists had to rely on simulations for their projections, in the absence of hard data about the conflict’s impact.