Global trade down in 2023, WTO says
According to the World Trade Organization's (WTO) annual projections, global trade growth will slow to 1.7% this year.
This comes as the war in Ukraine, inflation and turmoil in financial markets continue to tip the scales.
"The pace of trade expansion in 2023 is still expected to be weak, stifled by geopolitical tensions, food insecurity, potential financial instability stemming from monetary policy tightening and rising debt levels," the WTO said.
WTO economists forecast a trade volume growth of 1.7% in 2023. This is up from the 1% estimate made in October, but down from 2.7% in 2022.
A key factor behind this increase is the easing of controls linked to the Covid-19 pandemic in China, which would free up pent-up consumer demand in the country and thus stimulate international trade.
The evolution of trade between countries will be slow despite the fact that GDP forecasts for 2023 have improved in recent months (+2.4%), although uncertainties have clouded the horizon and have dampened the most optimistic forecasts.
As a result, trade and GDP will be lower in 2023 than their averages of 2.6% and 2.7% growth, respectively, over the last twelve years.
Already last year's 2.7% trade growth was lower than economists had estimated and this was mainly a consequence of the dismal performance in the October-December quarter, affected by higher commodity prices, tighter monetary policies to contain inflation and the resurgence of Covid in China.
This latest episode of the pandemic disrupted production and trade with China, which then decided to end this phase, lift all anti-covid measures and reopen its economy to the world.
These factors make forecasts for 2024 more uncertain than usual.
For now, experts believe that world trade could rebound by up to 3.2 % and that GDP could grow by 2.6 %.