GENEVA (Reuters) – The World Trade Organization (WTO) anticipates a gradual rebound in global goods trade following a rare decline in 2023, the third in three decades. The organization projects a growth of 2.6% in 2024 and 3.3% in 2025 for the volume of merchandise trade, adjusting from a previous estimate of a 3.3% increase in 2024. This follows a 1.2% decrease in trade volume last year. The WTO noted that reduced inflationary pressures could contribute to the recovery, although it remains cautious about potential risks.
These include trade fragmentation influenced by geopolitical tensions, increasing protectionist measures, and escalating conflicts in the Middle East affecting maritime trade routes. Historically, global trade has been robust, with significant declines only recorded during the pandemic in 2020 and the global financial crisis in 2009. In 2023, Europe experienced a marked reduction in import demand, primarily due to high energy prices and inflation. The WTO’s outlook for 2024 carries uncertainties, with projections ranging from a decrease of 1.6% to an increase of 5.8%. Recent geopolitical developments, such as statements from U.S.
Treasury Secretary Janet Yellen concerning trade policies with China, and the European Union’s investigation into Chinese wind turbine manufacturers, underscore the tense international trade environment. Ralph Ossa, Chief Economist at the WTO, stated that while trade fragmentation is occurring, it does not signify a move towards deglobalisation. He noted that trade is still growing, albeit at a slower pace than in the 1990s. The WTO has previously indicated that a complete geopolitical split could lower global GDP by 5%. Regarding the Red Sea situation, a critical route for global trade, the WTO observed a reduction but not a complete halt in shipping activities, with maritime freight rates remaining stable. Ossa emphasized the need for vigilance, particularly considering the potential impact of Middle East tensions on oil prices, which could significantly affect international trade.
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