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WTO Forecasts Gradual Recovery In Global Trade Amid Geopolitical Risks

Updated: Apr 11, 2024 04:05:33pm

WTO Forecasts Gradual Recovery In Global Trade Amid Geopolitical Risks

New Delhi, Apr 11 (KNN) The World Trade Organisation (WTO) has forecasted a gradual recovery in global goods trade this year following a contraction in 2023, driven by the lingering effects of high energy prices and inflation.

According to the WTO's Global Trade Outlook and Statistics report, the volume of world merchandise trade is projected to increase by 2.6 per cent in 2024 and 3.3 per cent in 2025, after falling 1.2 per cent in 2023.

However, the WTO cautioned that regional conflicts, geopolitical tensions, and economic policy uncertainty pose substantial downside risks to the forecast.

Conflicts in the Middle East have already diverted sea shipments between Europe and Asia, while tensions elsewhere could lead to trade fragmentation.

The WTO report highlighted signs of potential fragmentation in services trade, with the United States' imports of information, computer, and telecommunications (ICT) services from North American trading partners increasing to 23 per cent in 2023 from 15.7 per cent in 2018.

The decline in merchandise exports in 2023 was partly due to falling prices for commodities, such as oil and gas. However, the WTO expects inflation to gradually abate in 2024 and 2025, allowing real incomes to grow again in advanced economies, boosting consumption of manufactured goods.

WTO Director-General Ngozi Okonjo-Iweala emphasised the importance of mitigating risks like geopolitical strife and trade fragmentation to maintain economic growth and stability, stating that resilient supply chains and a solid multilateral trading framework are vital for improving livelihoods and welfare.

(KNN Bureau)


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