The World Trade Organization (WTO) has lowered its forecast for global trade growth this year
to 3% from 4.7% previously due largely to the impact of the war in Ukraine.
“The economic reverberations of this conflict will extend far beyond Ukraine's borders,” said the
WTO in a news release announcing its revised outlook.
“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,”
said the world trade body.
The Geneva-based organization said that global trade growth in 2023 is expected to be 3.4%,
noting that its estimates are less certain than usual due to uncertainty about the conflict in
Europe.
Over the past two years, cross-border trade has been a tailwind for the world economy -- fueled
largely by record-high U.S. imports of goods from Asia.
Yet if the WTO’s latest projections are accurate, the trajectory of trade growth means it will drop
back into the 1% to 3% range that persisted during the decade after the 2008-09 global financial
crisis.
Global trade only fell 5% in 2020 -- far less than the WTO’s initial worst-case projection of a
32% slump that would have rivaled the Great Depression -- before posting a 9.8% rebound in
growth during 2021.
This year’s trade disruptions will continue to be a drag on output because Russia’s invasion of
Ukraine has roiled markets for crucial commodities such as oil, steel, aluminum, fertilizer and
grain, said the WTO.
