Russia-Ukraine war, persistent inflation, tighter monetary policy, financial market uncertainty projected to cut world merchandise trade growth
Global merchandise trade is projected to grow 1.7% in 2022, slowing down from a 2.7% hike last year, according to a report from the World Trade Organization (WTO) on Wednesday.
The Russia-Ukraine war, persistent inflation, tighter monetary policy and financial market uncertainty are projected to weigh down world merchandise trade growth, the WTO said in its latest ‘Global Trade Outlook and Statistics’ report.
The WTO revised its projection upwards from its previous estimate of 1% from last October, thanks to China’s lifting of COVID-19 pandemic restrictions, which is expected to unleash pent-up consumer demand in the country, in turn boosting international trade.
Noting that trade, a force for resilience in the global economy, will remain under pressure from external factors this year, WTO Director-General Ngozi Okonjo-Iweala said:”This makes it even more important for governments to avoid trade fragmentation and refrain from introducing obstacles to trade.”
Trade growth in 2022 had come in below the expectations of 3.5% due to elevated global commodity prices, monetary policy tightening to tame inflation, and COVID‑19 related disruptions in China.
In 2024, trade growth is estimated to accelerate to 3.2% as GDP picks up to 2.6%, the WTO said.