World Trade Organization warned! ‘We must reduce the risks’ – Last Minute Economic News

The “Global Trade Outlook and Statistics” report prepared by WTO economists has been published.

Accordingly, it contracted by 1.2 percent in 2023 due to the effects of high energy prices and inflation.

While the economic value of global goods trade decreased by 5 percent to 24.01 trillion dollars last year, commercial service exports increased by 9 percent, reaching 7.54 trillion dollars, partially compensating for the decline in goods trade. Growth in business services trade was driven by a recovery in international travel and an increase in digitally delivered services.

Following last year’s contraction, global trade is expected to make a slow recovery this year, growing by 2.6 percent and 3.3 percent in 2025. Inflationary pressures are expected to decrease this year and consumption will increase as real income increases again, especially in developed economies.

Within the scope of these predictions, it is estimated that Africa’s exports will increase by 5.3 percent this year, more than all other regions. While it is predicted that exports will grow moderately at 3.6 percent in North America, 3.5 percent in the Middle East and 3.4 percent in Asia, the increase expectation for South Africa’s exports is 2.6 percent.

It is calculated that Europe’s exports will lag behind other regions with an increase of 1.7 percent.

It is predicted that imports will grow by 5.6 percent in Asia and 4.4 percent in Africa, supporting global demand. However, imports are estimated to increase below average in all other regions.

With this year’s Paris 2024 Summer Olympic Games and the easing of visa requirements in various countries, the increase in tourism and passenger traffic is expected to contribute to global commercial services trade.

There is a risk that geopolitical tensions and uncertainties regarding economic policies will restrict the recovery in trade. Food and energy prices may be subject to price increases again due to geopolitical developments.

While the economic impact of Suez Canal disruptions has been relatively limited so far, some sectors such as automotive products, fertilizers and retail are being affected by delays and increases in freight costs.

“THE RESILIENCE OF TRADE IS BEING TESTED BY DISTURBANCES ON TWO MAIN SHIPPING ROUTES”

WTO Director-General Ngozi Okonjo Iweala, in her assessment of the report, stated that global trade is moving towards recovery thanks to flexible supply chains and the multilateral trade framework, which are vital for improving livelihoods and prosperity. “In order to sustain economic growth and stability, it is essential that we reduce risks such as geopolitical tensions and trade fragmentation,” Iweala said. he warned.

WTO Chief Economist Ralph Ossa stated that some governments are taking steps aimed at reshaping production and shifting trade to friendly countries, adding:

“The resilience of trade is also being tested by disruptions to the world’s two main shipping routes, the Panama Canal, which is affected by freshwater shortages, and the diversion of traffic from the Red Sea. Under these conditions, where disruptions, geopolitical tensions and policy uncertainty continue, risks to the trade outlook are to the downside.”