WTO: Trade Growth to Slow Significantly in 2023
World trade volume is expected to grow 3.5% in 2022 before slowing to 1.0% in 2023, revised down from 3.4%, according to the World Trade Organization (WTO). Global trade is expected to lose momentum due to the war in Ukraine, high energy prices, inflation and monetary tightening.
"In August, energy prices were up 78% year on year, led by natural gas, which was up 250%. The 36% increase in the price of crude oil over the same period was small by comparison but still significant for consumers," per WTO. Food prices were up 11%, grain prices were up 15% and fertilizer prices were up 60%.
The data shows little promise for a turn around. But the Middle East is expected to have the strongest trade volume growth of any region in 2022 on both the export side at 14.6% and the import side at 11.1%, according to WTO.
"While trade restrictions may be a tempting response to the supply vulnerabilities that have been exposed by the shocks of the past two years, a retrenchment of global supply chains would only deepen inflationary pressures, leading to slower economic growth and reduced living standards over time," said WTO Director-General Ngozi Okonjo-Iweala. "What we need is a deeper, more diversified and less concentrated base for producing goods and services. In addition to boosting economic growth, this would contribute to supply resilience and long-term price stability by mitigating exposure to extreme weather events and other localized disruptions."