According to the latest WTO trade forecast released on Thursday, projections for growth in global merchandise trade in 2023 have been scaled back by WTO economists amid a continued slump that began in the fourth quarter of 2022.
The 3.3 percent growth in global merchandise trade projected for 2024 remains nearly unchanged from the previous estimate, the WTO said.
The WTO expects real-world GDP to grow by 2.6 percent at market exchange rates in 2023 and by 2.5 percent in 2024,
World trade and output slowed abruptly in the fourth quarter of 2022 as the effects of persistent inflation and tighter monetary policy were felt in the United States, the European Union and elsewhere. The trade slowdown appears to be broad-based, involving a large number of countries and a wide array of goods, the WTO said.
According to the forecast, trade growth should pick up next year accompanied by slow but stable GDP growth. However, signs are starting to emerge of supply chain fragmentation, which could threaten the relatively positive outlook for 2024.
"We do see some signs in the data of trade fragmentation linked to geopolitical tensions. Fortunately, broader deglobalization is not here yet," WTO Chief Economist Ralph Ossa said.
"The projected slowdown in trade for 2023 is cause for concern, because of the adverse implications for the living standards of people around the world," WTO Director-General Ngozi Okonjo-Iweala said.
"Global economic fragmentation would only make these challenges worse," she said, while calling on WTO members to strengthen the global trading framework by avoiding protectionism and fostering a more resilient and inclusive global economy.
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