WTO trims 2023 global merchandise trade estimate to 0.8% in 2023

Real world GDP is also expected to see growth, albeit modestly, at 2.6 per cent in 2023 and 2.5 per cent in 2024.

Trade and economic momentum faced unexpected challenges in the last quarter of 2022. Persisting inflation combined with stringent monetary policies have affected major economies like the US and the European Union. The ongoing conflict in Ukraine has further dampened the trade atmosphere, leading to a widespread slowdown affecting numerous countries and a diverse range of goods, as per WTO’s report.

The WTO remains cautiously optimistic for 2024, forecasting a revival in trade growth, complemented by stable GDP expansion. Industries more vulnerable to economic fluctuations are expected to regain equilibrium and show positive signs as inflation settles and interest rates begin to decrease.

There are emerging concerns related to the potential fragmentation of global supply chains that could jeopardise this relatively upbeat outlook for the next year. For instance, the proportion of intermediate goods, indicative of global supply chain activity, dipped to 48.5 per cent in the first half of 2023, a decline from the 51 per cent average witnessed over the preceding three years. Additionally, the share of Asian bilateral trade partners in the US trade for parts and accessories, a crucial subset of intermediate inputs, reduced to 38 per cent in the initial half of 2023, marking a decrease from the 43 per cent reported in the corresponding period of 2022.

“The projected slowdown in trade for 2023 is cause for concern, because of the adverse implications for the living standards of people around the world. Global economic fragmentation would only make these challenges worse, which is why WTO members must seize the opportunity to strengthen the global trading framework by avoiding protectionism and fostering a more resilient and inclusive global economy. The global economy, and in particular poor countries, will struggle to recover without a stable, open, predictable, rules-based and fair multilateral trading system,” said WTO director-general Ngozi Okonjo-Iweala.

Fibre2Fashion News Desk (DP)