World trade will slow next year predicted by WTO

Global growth in aggregate trade will slow next year. The World Trade Organization (WTO) has forecast trade growth of 1 percent by 2023, amid rising global energy prices, ongoing interest rate hikes, and uncertainty in China’s manufacturing sector amid the Covid-19 pandemic. News AP. According to the trade organization based in Geneva, Switzerland, world trade growth is expected to reach 3.5 percent this year. Last April, however, the WTO had forecast growth of 3 percent.

Next year around the same time, this increase will be 1 percent. The previous forecast already stated that trade growth will be 3.4 percent next year. WTO Director-General Ngozi Okonzo Iweala told reporters that risks to trade growth next year are definitely on the downside. WTO economists said trade growth is now in a better position than forecast in mid-year. Total trade increased as consumer countries, with the exception of Russia, increased their trade with oil and gas-producing countries in the Middle East as a result of the attack on Ukraine.

The WTO found several causes of the overall trade impact, including higher fuel prices due to war. One of these reasons is the imposition of sanctions on Moscow by the European Union (EU), a major consumer of Russian oil and natural gas. Ngozi Okonjo Iweala said the global economy is currently facing a multi-faceted crisis. Several countries of the world, including the United States, are in a financial crisis. Low-income developing countries are at serious risk from food insecurity and the debt crisis. Meanwhile, high energy prices in Europe are putting pressure on households and business operations. At the same time, the novel in China not due to the virus outbreak, production, and the economic slowdown are disrupting normal life. According to the WTO, world trade is now recovering from the recession caused by the Covid-19 pandemic.

However, rate hikes by the US Federal Reserve and other central banks to contain inflation could have serious consequences for the housing sector, auto sales, and bond prices. Contraction in demand and not Chinese exports are likely to decline due to continued production cuts amid the virus pandemic. The Geneva-based trade body also said Russia has not reported its trade statistics to the WTO since January this year. This is why Russian trade statistics are unclear to the World Trade Organization. In addition, in the countries included in the CIS (Confederation of Independent States), which consists of the countries of the former Soviet Union, exports fell by about 10.5 percent in the second quarter compared to the first quarter of this year. app.

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