WTO lowers 2023 trade growth forecast amid manufacturing slowdown

The World Trade Organisation (WTO) on Thursday lowered the trade growth projection for 2023 to 0.8 per cent amid global manufacturing slowdown. A WTO statement said the projections for growth in global merchandise trade in 2023 have been scaled back by WTO economists amid a continued slump that began in the fourth quarter of 2022.According to the latest WTO trade forecast, the "volume of world merchandise trade is now expected to grow by 0.8 per cent this year, less than half the 1.7 per cent increase forecasted in April".The 3.3 per cent growth projected for 2024 remains nearly unchanged from the previous estimate, it said.
World trade and output slowed abruptly in the fourth quarter of calendar year 2022 as the effects of persistent inflation and tighter monetary policy were felt in the US, the European Union, and elsewhere, and as strained property markets in China prevented a stronger post Covid-19 recovery from taking root, it said.Together with the consequences of the war in Ukraine, these developments have cast a shadow over the outlook for trade.“The trade slowdown appears to be broad-based, involving a large number of countries and a wide array of goods,” it said, adding that trade growth should pick up next year accompanied by slow but stable GDP growth.“The projected slowdown in trade for 2023 is a cause for concern, because of the adverse implications for the living standards of people around the world,” WTO Director-General Ngozi Okonjo-Iweala said.
Global economic fragmentation would only make these challenges worse, which is why WTO members must seize the opportunity to strengthen the global trading framework by avoiding protectionism and fostering a more resilient and inclusive global economy, she said.