(12 April 2024 – Switzerland) Global trade volumes are forecast by the World Trade Organisation (WTO) to recover slowly in 2024 following only the third annual decline in three decades.
The WTO declares in its latest Global Trade Outlook report that easing inflation and debt servicing pressure should underpin rising merchandise volumes, set to increase by 2.6 percent in 2024 and by 3.3 percent in 2025 following a rare 1.2 percent decline last year. The WTO previously forecast a 3.3 percent increase in 2024.
The WTO warned of risks from trade fragmentation due to geopolitical tensions, rising protectionism and a worsening Middle East crisis as hostilities commence between Iran and Israel and attacks on commercial ships in the Red Sea divert trade between Europe and Asia.
“There is evidence of trade fragmentation, but not deglobalisation, with trade growth continuing but at a rate slower than in the 1990s. On the Red Sea, through which 12 percent of global trade normally passes, shipping has reduced but not halted and maritime freight rates are contained for now” commented WTO Chief Economist Ralph Ossa.
“The situation needs to be closely monitored as the risk of oil price spikes from an escalation of the Middle East crisis will probably be more significant than Suez Canal disruption itself. As soon as energy prices are affected significantly, then of course we feel repercussions on international trade” Ossa added.