By Shipping Australia
A global slow-down in economic activity is on the cards, according to the World Trade Organization.
“Trade continues to be a force for resilience in the global economy, but it will remain under pressure from external factors in 2023.This makes it even more important for governments to avoid trade fragmentation and refrain from introducing obstacles to trade. Investing in multilateral cooperation on trade, as WTO members did at our Twelfth Ministerial Conference last June, would bolster economic growth and people’s living standards over the long term,” said WTO Director-General Ngozi Okonjo-Iweala.
Slow down, you move too fast
Growth will slow from 2.7% in 2022 to 1.7% this year, economy-boffins say, driven by the war in Ukraine, high inflation, monetary policy and financial market uncertainty.
Although growth is slowing from 2.7% last year, that earlier growth figure was, itself, a slowdown from the WTO’s earlier October forecast of 3.5%.
High global commodity prices, monetary policy (again), and the effects of COVID were among the drags on the economy last year.
The world economy has (somewhat) dodged a bullet as the most pessimistic growth forecasts were in the 0.5% range if countries split into competing economic blocks. However countries around the world remained broadly open and studies by the WTO have discovered that vulnerable economies were able to compensate for disruption to food supplies by finding alternative products and suppliers.
Back to the future
For the forthcoming months, the future is – if not exactly optimistic – then it is less bad than feared. The 1.7% forecast for 2023 is 0.7 percentage point increase on the previous estimate from last October. Relaxation of anti-COVID controls in China are boosting international trade, the WTO reckons.
Economic analysts at the WTO are forecasting a rebound to 3.2% growth but they note that the estimate is “more uncertain” than usual because of world politics, food supply shocks, and the unforeseen fallout from monetary tightening.
