World trade in goods will grow 1.7% and will slow down in 2023, predicts WTO – 05/04/2023 – Market

The growth of global trade and world GDP in 2023 is expected to be below the average of the last 13 years, warned the World Trade Organization (WTO) this Wednesday (5), in Geneva, Switzerland.

The forecast for this year is for growth of only 1.7% in the volume of trade in goods between countries, which does not include services. The same study estimates that global GDP will increase by 2.4% this year.

Even so, the forecast is higher than the estimate made in October, when the number was just 1% for 2023. WTO economists attributed this improvement to the relaxation, after three years, of Covid-19 measures in China, the that is impacting trade not just domestically but globally.

The new brands, however, are below the average since 2010. According to these calculations, the growth of commerce has been 2.6% per year, and GDP, 2.7%.

Effects of the war in Ukraine, persistently high inflation, tighter monetary policy and financial market uncertainty are some, but not the only, reasons for the pessimistic forecast for 2023.

“The lingering effects of Covid-19 and rising geopolitical tensions were the main factors impacting trade and production in 2022 and will likely be the case in 2023 as well,” said WTO Chief Economist Ralph Ossa.

“The rise in interest rates in advanced economies has also revealed weakness in banking systems, which could lead to broader financial instability if left unchecked. Governments and regulators need to be alert to these and other financial risks in the coming months,” said Ossa .

For WTO Director-General Ngozi Okonjo-Iweala, “trade remains a resilient force in the global economy, but will remain under pressure from external factors in 2023. This makes it even more important for governments to avoid trade fragmentation and refrain from introducing barriers to trade”.

“Investing in multilateral trade cooperation, as WTO members did at our 12th Ministerial Conference last June, would bolster economic growth and people’s living standards in the long term,” added the director-general.

The new brands leave the world economy in a worse situation than last year, when trade grew by 2.7%. On the other hand, the WTO forecasts for 2022 did not materialize. The agency had expected 3.5% growth, but “a steeper-than-expected decline in the fourth quarter detracted from growth for the year.”

Nothing compares to 2021, in which, after a year of pandemic retraction in 2020, trade jumped by an incredible 9.4%. And, for 2024, the WTO seems to be optimistic: it forecasts growth of 3.2% in trade and 2.6% in GDP.