The WTO slashed global trade growth forecasts for 2023

Container ship in the port of Antwerp, Belgium (Reuters) (YVES HERMAN /)

World trade will grow by 3.5% this year, but in 2023 it will register a sharp drop with an increase of just 1 percentaccording to projections presented this Wednesday by the World Trade Organization (WTO).

The disturbances affecting the economy will make their full impact felt on international trade next year, but The organization has asked countries not to opt for protectionism, because its consequences could be even worse.

Although the projection for 2022 grew half a point compared to the April forecast, the decrease is strong for 2023, since the previous report projected a growth of 3.4%.

Regarding world GDP, according to the new WTO forecasts, world GDP is expected to grow by 2.8% in 2022 and a 2.3% in 2023 (1.0 percentage point less than the previous forecast for this last figure).

By comparison, the OECD, which has kept its forecast at 3% for 2022, recently announced that it expects 2.2% growth next year. The IMF, for its part, expects growth of 3.2% this year and 2.9% in 2023.

According to the WTO, demand for imports will slow down because growth will be weak in the largest economies, which are the ones that tend to stimulate economic dynamics.

Ship in the Suez Canal (Reuters)
Ship in the Suez Canal (Reuters) (MOHAMED ABD EL GHANY/)

It can already be clearly seen that High energy prices caused by the Russian-Ukrainian war will cause household spending to decline and raise the costs of industrial production.

Meanwhile, in the United States, where growth is expected to be slightly stronger than in Europe, the tightening of fiscal policy will affect sectors sensitive to interest rates, such as real estate, automobiles and fixed investments.

The organism observes that there is a great uncertainty about the forecasts due to the change in monetary policy in advanced economies and to the unpredictable nature of the war launched by Russia in the Ukraine.

The WTO Nor does he expect China to lead a recovery anytime soon. because it is still immersed in its production problems related to its strict COVID zero measures, in addition to weak external demand.

The organization’s forecast recognizes that, in this scenario, countries could be tempted to impose trade restrictions to protect themselves, but warns that the main effect would be increased inflationary pressure.

What is needed – from the WTO’s point of view – is for the production of goods and services to be more diversified, which would help growth and more stable supplies and prices in the long run.

A broad production base would also serve to reduce the exposure of supply chains to extreme events caused by climate change.

(With information from EFE and AFP)


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