(3 minutes read) (Global)
The deleterious impact of Russia – Ukraine is casting shadows on global trade also. Factors like inflation, tighter monetary policies, and financial uncertainty being unveiled across geographies will pull down the growth for 2023, says World Trade Organization’s (WTO) projections recently released
The deleterious impact of Russia -Ukraine is casting shadows on global trade also. Factors like inflation, tighter monetary policies, and financial uncertainty being unveiled across geographies will pull down the growth for 2023, says World Trade Organization’s (WTO) projections recently released. The report points out that the global economy has marginally improved, but the pace of increase is weak, affecting the trade expansion.
According to the WTO projections, the trade volume in 2023 is expected to grow at 1,7%, a marginal increase from 1% estimated in October last year. The growth would be mostly on account of improvement in the relaxation of controls in China. This is expected to increase pent-up consumer demand. The WTO also assumes that a peaceful end to the Russia-Ukraine war and the easing of global tensions also could lead to higher expansion of world trade. Rapidly rising global interest rates can also have an impact on global trade, though the WTO feels that recent bank failures in the US and EU may not have much impact since it was largely addressed.
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Dwelling on the trade prospects for 2023, WTO Director General Ngozi Okonjo-Iweala appealed to the governments to avoid barriers to trade since that would lead to fragmentation of global trade. The world trade body also pointed out that a 2.7% increase in trade volume was lower than the 3.5% rate forecast in October by the WTO, due to factors including rising global commodity prices, tightening monetary policy in response to inflation, and Covid-19 outbreaks that disrupted production and trade in China. The silver lining in the WTO forecast is that in 2024, the trade expansion growth is expected at 3.2%, as it would rebound.
