The World Trade Organization (WTO) has sharply lowered its growth forecasts for goods trade this year. Growth is expected to be over half lower than predicted six months ago.
The WTO refers to inflation in the United States and Europe, the war in Ukraine and China’s slow recovery as reasons for the lower growth expectations. The Geneva-based institute now expects growth of 0.8 percent compared to last year. Initially, a growth of 1.7 percent was expected.
The new forecast is significantly lower than the average of 2.6 percent annual growth since the global financial crisis. “The trade slowdown appears to be broad-based, involving a large number of countries and a wide range of goods, particularly iron and steel, office and telecom equipment, textiles and clothing,” the WTO said. A favourable exception is passenger cars, sales of which have risen sharply so far in 2023.
After a growth of 3 percent last year, goods trade fell by 0.5 percent in the first half of 2023 compared to a year earlier. Only a “modest recovery” is expected in the months up to and including December.
WTO Director-General Ngozi Okonjo-Iweala calls the lower growth forecast “a cause for concern due to the negative impact on the living standards of people around the world.”