The World Trade Organization (WTO) on Wednesday projected a recovery in merchandise exchange this year, but warned that regional conflicts, geopolitical tensions and uncertainty about economic policy could cloud this perspective.
According to the WTO annual forecasts, the volume of world trade in goods will increase by 2.6% in 2024compared to a projection of 3.3% made in October, and 3.3% in 2025.
These data represent a significant improvement compared to the unexpected 1.2% drop suffered in 2023, after the WTO forecast a slight increase of 0.8%.
“We are moving towards the recovery of global trade, thanks to the resilience of supply chains and the solid multilateral trade framework,” declared the director general of the WTO, Ngozi Okonjo-Iweala.
However, “it is imperative that we mitigate risks such as geopolitical conflicts and trade fragmentation, to maintain economic growth and stability,” he warned.
WTO estimates that GDP will not increase in two years
The report also estimates that global GDP growth will remain broadly stable over the next two years, reaching 2.6% in 2024 and 2.7% in 2025.
High energy prices and inflation weighed heavily on demand for manufactured goods in 2023, resulting in a 1.2% decline.
“The downward revision is mainly due to the worse than expected results in Europe,” WTO chief economist Ralph Ossa told AFP.
However, the organization stated that trade developments in the services sector were much more encouraging last year, with growth of 9%.
The WTO does not offer specific forecasts regarding services, but assured that it expects greater growth this year, especially related to the increase in tourism and passenger transport around the upcoming Paris Olympic Games and the European soccer championships.
It also indicated that inflationary pressures that weighed on trade last year should ease in 2024, boosting consumption of manufactured goods.
However, The report warns that “geopolitical tensions and political uncertainty could limit the scope of trade recovery.” The document points out, for example, the crisis in the Red Sea and the disruptions of the Suez Canal linked to the war in Gaza.
On the other hand, the WTO observed a growing “fragmentation” of trade.
Ossa highlighted bilateral trade between the United States and China, which reached a record level in 2022 and yet registered growth in 2023 that was 30% lower than that of both countries with the rest of the world.
Source: Ambito
