The World Trade Organization (WTO) has revised its projection for global trade growth in 2023 from 1% to 1.7%, indicating a faster-than-anticipated recovery of the global economy. However, persistent issues such as the conflict in Ukraine, high inflation, and financial uncertainty pose risks to the growth trajectory of the global trade landscape.
World Trade Organization’s Projection for Trade Growth
The WTO has raised its projection for global trade growth in 2023 from 1% to 1.7%, despite ongoing concerns over the war in Ukraine, high inflation, and financial uncertainty. However, the global trade body has cautioned that the trade growth is expected to remain subpar due to ongoing conflicts and stubbornly high inflation.
World Trade Growth Below the 12-Year Average
The projected trade growth of 1.7% for 2023 is below the 12-year average of 2.6%, which has been the norm since the global financial crisis in 2008.
COVID Relaxation and Banking Systems Failure
The WTO has noted that the relaxation of COVID-19 pandemic controls in China is expected to unleash pent-up consumer demand in the country and contribute to the boost in international trade. However, the WTO’s Chief Economist Ralph Ossa has warned that interest rate hikes in advanced economies have revealed weaknesses in banking systems that could lead to wider financial instability if left unchecked.
WTO Expects Trade Growth to Rebound in 2024
Despite the uncertainties and risks facing global trade, the WTO expects trade growth to rebound to 3.2% in 2024. However, this estimate remains uncertain and heavily dependent on the outcome of the conflict between Russia and Ukraine.
The revision of the WTO’s projection for global trade growth in 2023 from 1% to 1.7% indicates a faster-than-anticipated recovery of the global economy. However, persistent issues such as the conflict in Ukraine, high inflation, and financial uncertainty pose risks to the growth trajectory of the global trade landscape.
