WTO lowers world trade forecast after previous year’s downturn
Published: Wednesday, Apr 10th 2024, 15:40
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According to the World Trade Organization (WTO), global trade in goods shrank by 1.2 percent last year, but is expected to grow by 2.6 percent again this year. In its latest forecast on Wednesday in Geneva, the organization painted a more pessimistic picture than in October.
Last fall, the WTO was still forecasting growth of 0.8% for 2023 and 3.3% for 2024. However, high energy prices and inflation dampened global demand for industrial goods in 2023.
Imports fell in most regions, most strongly in the European countries. Last year, they shrank by 4.7 percent in Europe and exports by 2.6 percent. The only exceptions were the countries that export energy resources and supported their purchases thanks to the income from high prices in this area.
However, Switzerland was also able to increase both its imports of goods by 2% and its exports by 5% and is one of the top 20 countries in both categories.
Higher real wages
WTO experts expect inflationary pressure to ease this year. As a result, real wages could rise and demand could pick up again, particularly in richer countries, they said. The WTO is forecasting global trade growth of 3.3 percent for 2025.
However, the recovery forecast is subject to reservations. In view of armed conflicts, geopolitical tensions and uncertainty about economic policy measures, "the downside risks outweigh the upside risks", warned the WTO.
Its experts pointed out the problems on the two most important sea trade routes in the Red Sea and the Panama Canal, for example, as well as the tensions between the USA and China, the two countries that top the rankings of the world's largest exporting and importing countries.
©Keystone/SDA
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