Brittle Global Trade Recovery at Risk - WTO
(12 April 2022 – Switzerland) The World Trade Organization (WTO) has slashed its global trade growth outlook to three percent for 2022 primarily due to the lingering impacts from the Russian invasion of Ukraine.
The WTO projects merchandise trade volume growth of three percent in 2022, down sharply from the group’s previous forecast of five percent and well below the increase of ten percent recorded in 2021. The WTO is calling for governments and multilateral organisations to work together collaboratively to help facilitate trade and alleviate crippling supply chain disruptions.
The most discernible economic impact of the war has been a steep increase in commodity prices. Despite their relatively small shares in world trade and output, Russia and Ukraine are key suppliers of essential goods including food, energy, fertilisers such as Potash and other raw materials and production inputs which are now threatened by the conflict. Grain shipments through Black Sea ports have already been halted, with potentially dire consequences for food security in poor countries.
“The last few years have been tumultuous for the world economy. The Covid-19 pandemic continues to deliver economic shocks in different parts of the world, and we must now brace for the fallout from the war in Ukraine. It’s now clear that the double whammy of the pandemic and the war has disrupted supply chains, increased inflationary pressures, and lowered expectations for output and trade growth” stated WTO Director-General Ngozi Okonjo-Iweala.
“The downside risks to the forecast outweigh the upsides. Things that could lead us to one or the other end of the interval, most likely on the downside I suspect, would be a worsening of the conflict in Ukraine and also perhaps sanctions directly on exports of Russian oil. On the upside, perhaps there might be some sort of a resolution of the conflict, but at the moment I would say most of the risks are heavily on the downside” commented WTO Senior Economist Coleman Nee to Global Trade Review (GTR).