Kirisitiana Uluwai 
[File Photo]
In a new forecast released this month, the World Trade Organization says trade growth in 2023 is expected to be insignificant regardless of a slight upgrade in Gross Domestic Product projections.
Due to factors like the war in Ukraine, stubbornly high inflation, tighter monetary policy and financial market uncertainty, the volume of world merchandise trade is expected to grow by 1.7 percent this year.
Trade continues to be a force for resilience in the global economy, but it will remain under pressure from external factors the rest of this year
Chief Economist Ralph Ossa says the current World Trade Organization’s forecast is below the average trade growth of 2.6 percent for the past 12 years.
Audio Player“We estimate that merchandize trade volume will grow by 1.7 percent in 2023 which is slow by historical standards.”
Ossa also attributed the recent banking crisis to low global trade engagements.
Audio Player“Downside risks to the forecast include the vulnerabilities that have been revealed in the banking sector of late it appears that these recent banking failures in the US and Europe have been mostly contained but rapidly increasing interest rates could create further strains in financials markets that then could of course also have implications for international trade.”
Meanwhile Asia is expected to be making disproportionate contribution to global demand for traded goods.
Economists say the sharp decline global trade growth is placing monetary policy makers and finance minister in a tight spot to try and tame inflation while maintaining and keep up full employment.
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