The World Trade Organization (WTO) has improved its forecast for world trade growth for 2022 to 3.5% from 3% expected in April, but significantly lowered the forecast for 2023 – to 1% from 3.4%.
“Global trade growth momentum will slow in the second half of 2022 and remain weak in 2023 due to multiple shocks in the global economy,” the organization said in a report released on Wednesday.
Import demand is expected to decline as the world’s major economies slow down for a variety of reasons.
“In Europe, high energy prices caused by the Russian-Ukrainian conflict will lead to a fall in consumer spending and higher costs for producers. In the US, monetary tightening will hit interest-sensitive sectors,” the report says. “China has to deal with outbreaks COVID-19, a decline in production, as well as weakness in external demand.”
Rising spending on fuel, food and fertilizer imports could lead to food shortages and debt problems in developing countries, the WTO warns.
“The global economy is facing a complex crisis,” said WTO Director-General Ngozi Okonjo-Iweala. “The picture for 2023 has become much bleaker.”
The organization also cut its global economic growth forecast for 2023 to 2.3% from 3.3%. In 2022, according to WTO estimates, the global economy will grow by 2.8%.
The report notes that the forecasts are accompanied by a high degree of uncertainty associated with the changing policies of the central banks of developed countries, as well as the unpredictable nature of the Russian-Ukrainian war.
