The World Trade Organization has updated its 2024 global trade growth forecast to 2.7%, highlighting a recovery despite the challenges of Middle East conflicts and diverging monetary policies. It also anticipates 3% growth in 2025, provided geopolitical tensions remain under control.
The World Trade Organization (WTO) has slightly raised its forecast for global trade growth this year and projected a further 3% growth in 2025, contingent on the containment of Middle East conflicts.
The WTO report noted that after a slump in 2023 caused by high inflation and rising interest rates, global trade has rebounded. In April, the WTO had predicted a 2.6% rise in trade volumes for 2024, which it has now revised to 2.7%.
WTO Director-General Ngozi Okonjo-Iweala in a statement said,”We are expecting a gradual recovery in global trade for 2024, but we remain vigilant of potential setbacks, particularly the potential escalation of regional conflicts like those in the Middle East.”
The WTO, however, has cautioned that escalating tensions in the Middle East could significantly impact not only the countries directly involved but also global energy prices and shipping routes. Israel’s recent military actions against Hezbollah in Lebanon, coupled with its prolonged conflict with Hamas in Gaza, have raised concerns of a wider regional war.
The WTO also highlighted diverging monetary policies among major economies as a potential downside risk to its projections. This “could lead to financial volatility and shifts in capital flows as central banks bring down interest rates,” the report said, emphasizing that this would make debt servicing more challenging for poorer countries.
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