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Global Trade Slowdown, Recession Looms - WTO

Global Trade Slowdown, Recession Looms - WTO

(07 October 2022 – Switzerland) The World Trade Organization (WTO) warned of a sharp slowdown in global trade in 2023.

Import demand is set to be limited by higher energy and food prices, rising interest rates globally and even a possible contraction if the war in Ukraine worsens.

The WTO projected that after expanding at a 3.5 percent pace in 2022, growth in the trade of goods in 2023 will plunge to just 1 percent. That’s considerably below the agency’s most recent estimate from April, which had trade expanding at a 3.4 percent next year. They also added that there was high uncertainty over its forecasts. It provided a band of trade growth expansion of 2.0 percent to 4.9 percent for this year and of -2.8 percent to 4.6 percent for 2023.

To compound matters, OPEC+ later announced a cut in production which will put further upward pressure on energy prices and ultimately lead put a strain on consumer demand and economic growth.

"Policymakers are confronted with unenviable choices as they try to find an optimal balance among tackling inflation, maintaining full employment and advancing important policy goals such as transitioning to clean energy,” WTO Director General Ngozi Okonjo-Iweala said in a statement.

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