The WTO predicts a sharp slowdown in global trade

He global commodity trade will grow by just 0.8% in 2023, a sharp slowdown compared to 2.7% in 2022, due to factors such as constant inflation and restrictive monetary policies in NOW and European Unionindicated today the World Trade Organization (WTO).

The assessment revises almost half of the WTO’s estimates from six months ago, when it forecast a 1.7% increase in global trade, and also recognizes as negative factors the lingering effects of the war in Ukraine on the global economy and problems prevailing in China’s real estate sector.

For 2024, the Geneva-based organization maintains its April forecasts and expects global merchandise trade to grow by 3.3%, driven by a “slow but steady” increase in global GDP, which the WTO estimates will be 2.6 % in 2023 and 2.5% in 2023 and 2024.

The WTO expects that next year certain sectors more sensitive to economic cycles (such as industrial machinery) will stabilize, inflation will moderate and interest rates will begin to decrease, although it continues to observe with concern the initial signs of fragmentation in the global supply chain.

A symptom of this, according to the WTO, is the progressive reduction of exports of semi-finished products from Asia to the US, due to factors such as the growing political tension between Washington and Beijing, which has spread to the economic sector.

“Global economic fragmentation will only make the challenges more difficult, and that is why WTO members must strengthen the multilateral trade framework, avoiding protectionism and fostering a more resilient world economy,” he analyzes the director general of the organization, Ngozi Okonjo-Iweala.

He WTO Chief Economist Ralph Ossa He added that although geopolitical tensions are causing these first signs of fragmentation, “fortunately there is still no great deglobalization.”

“Goods continue to be produced through complex supply chains, but their scale seems to have reached a certain stagnation, at least in the short term,” he analyzed.

The report does not cover trade in services, although the WTO stresses that its preliminary data also points to a moderation in its growth, following a strong recovery in sectors such as transport and travel last year.