New Delhi: Global trade growth is expected to pick up gradually this year after a contraction in 2023, but regional conflicts, geopolitical tensions and economic policy uncertainty pose significant downside risks, according to a WT forecast released on Wednesday.
However, the World Trade Organization (WTO) reduced the trade growth projection for 2024 to 2.6 percent.
In October last year, the organization had estimated that the growth would be 3. percent.
"Global goods trade is expected to grow slowly this year after a contraction in 2023, which was driven by the longer-lasting effects of higher energy prices and inflation," the WTO said in a statement.
"It says world merchandise trade volume should grow by 2.6 percent in 2024 and 3.3 percent in 2025, after falling by 1.2 percent in 2023.
"However, regional conflicts, geopolitical tensions and economic policy uncertainty pose significant downside risks to the forecast," it added.,
The decline in merchandise exports in 2023 was partly due to falling prices of commodities such as oil and gas.
“In 2024 and 2025, inflation is expected to gradually ease, allowing real incomes in advanced economies to rise again, boosting consumption of manufactured goods. A recovery in demand for tradable goods is already evident in 2024.
"This is related to an increase in household consumption linked to improvements in income prospects," it said.
It also said conflict in the Middle East has diverted maritime shipments between Europe and Asia, while tensions elsewhere could lead to trade fragmentation.The WTO said rising protectionism is another risk that could undermine the trade recovery in 2024 and 2025.
WTO Director-General Ngozi Okonjo-Iweala said, “We are making progress towards global trade reform, thanks to resilient supply chains and a single multilateral trading framework, which are vital for improving livelihoods and well-being.
“It is imperative that we minimize risks such as geopolitical conflict and trade fragmentation to maintain economic growth and stability."
However, the World Trade Organization (WTO) reduced the trade growth projection for 2024 to 2.6 percent.
In October last year, the organization had estimated that the growth would be 3. percent.
"Global goods trade is expected to grow slowly this year after a contraction in 2023, which was driven by the longer-lasting effects of higher energy prices and inflation," the WTO said in a statement.
"It says world merchandise trade volume should grow by 2.6 percent in 2024 and 3.3 percent in 2025, after falling by 1.2 percent in 2023.
"However, regional conflicts, geopolitical tensions and economic policy uncertainty pose significant downside risks to the forecast," it added.,
The decline in merchandise exports in 2023 was partly due to falling prices of commodities such as oil and gas.
“In 2024 and 2025, inflation is expected to gradually ease, allowing real incomes in advanced economies to rise again, boosting consumption of manufactured goods. A recovery in demand for tradable goods is already evident in 2024.
"This is related to an increase in household consumption linked to improvements in income prospects," it said.
It also said conflict in the Middle East has diverted maritime shipments between Europe and Asia, while tensions elsewhere could lead to trade fragmentation.The WTO said rising protectionism is another risk that could undermine the trade recovery in 2024 and 2025.
WTO Director-General Ngozi Okonjo-Iweala said, “We are making progress towards global trade reform, thanks to resilient supply chains and a single multilateral trading framework, which are vital for improving livelihoods and well-being.
“It is imperative that we minimize risks such as geopolitical conflict and trade fragmentation to maintain economic growth and stability."
