In 2022, the amount of global merchandise trade is projected to increase by 3.5%, which is somewhat higher than the 3.0% forecast made in April.
However, volume will drastically decrease from the previously predicted 3.4% to just 1% the next year.
Costly goods and inflation
According to the WTO, when growth slows in major economies for various reasons, demand for imports is anticipated to decline.
The tightening of monetary policy in the United States will have an impact on spending in industries where interest rates are significant, such as housing, automobiles, and fixed assets.
Along with poor external support, China continues to deal with COVID-19 outbreaks and production interruptions.
Worry for emerging nations.
As import costs for gasoline, food, and fertiliser rise, developing nations may experience food insecurity and debt distress. This is another effect of the conflict in Ukraine.
According to the estimate, overall energy price increases in August increased by 78% from the previous year. Food costs climbed by 11%, grain costs by 15%, and fertiliser costs by 60%.
In recent months, a lot of currencies have depreciated against the dollar, which is another factor raising the price of food and fuel.
The crucial significance of trade.
The WTO Director-General, Ngozi Okonjo-Iweala, stated that governments must make “unenviable decisions” in order to strike the right balance between combating inflation, preserving full employment, and achieving crucial objectives like the switch to sustainable energy.
She emphasised the importance of trade as a mechanism for achieving net-zero carbon emissions while also increasing the supply of products and services globally.
In opposition to trade restrictions.
“Trade restrictions may be an alluring response to the supply vulnerabilities that have been revealed by the shocks of the last two years, but a retrenchment of global supply chains would only deepen inflationary pressures, leading to slower economic growth and lower living standards over time,” she said.
“A deeper, more varied, and less concentrated base for creating goods and services is what we need. By reducing exposure to extreme weather events and other localised disruptions, this would support supply resilience and long-term price stability in addition to fostering economic growth.
According to the WTO, with an expected export growth of 14.6%, the Middle East will lead all other regions. It will be followed by Africa, North America, Asia, Europe, and South America.
