WTO reduce its global goods trade forecast for 2023

In its Global Trade Outlook and Statistics Update: October 2023, the WTO notes that a continued recession that started in the fourth quarter of 2022 appears to be the cause of the trade slowdown, which affects a significant number of nations and a diverse range of goods. Inflation, rising interest rates, the strengthening of the US dollar, and geopolitical tensions are some of the causes of the slowdown in trade. However, the multilateral financial institution predicts a 3.3% increase in trade for 2024.

Photo Source: Shutterstock

New Delhi, October 6: In response to a slowdown in global manufacturing, the World Trade Organisation (WTO) has reduced its global goods trade prediction for 2023, dropping it from 1.7% to 0.8%. On Thursday, the WTO announced that it has revised its global goods trade prediction for the year.

According to the international trade body’s Global Trade Outlook and Statistics Update: October 2023, the slowdown in trade looks to be widespread, affecting a big number of nations and a diverse range of goods in the midst of a persistent downturn that started in the fourth quarter of 2022. The 3.3% increase predicted for 2024, however, is essentially unchanged from the 3.2% prediction from the year before.

“The exact causes of the slowdown are not clear, but inflation, high interest rates, US dollar appreciation, and geopolitical tensions are all contributing elements,” the WTO said.

The anticipated slowdown in trade, according to WTO Director-General Ngozi Okonjo-Iweala, is a matter for concern since it could lower people’s living standards all across the world, especially in developing nations.

The multilateral institution believes that the forecast’s risks were balanced. It would be necessary to keep interest rates higher for a longer period of time if China’s recession was more severe than anticipated and advanced nations experienced surging inflation.

The WTO has further said, “The data suggest that goods continue to be produced through complex supply chains, but that the extent of these chains may have reached their high-water mark.”

According to the report, export growth in Asia is anticipated to go up in the second half of the year while export growth in Europe is anticipated to become negative.