WTO Halves Trade Growth Estimate for Remainder of 2023
The World Trade Organization's Chief Economist Ralph Ossa dropped his outlook for world trade growth by over half for the remainder of the year, predicting that world merchandise trade volume growth will be at a 0.8% rate instead of a 1.7% rate. Issuing a report on Oct. 5, Ossa noted that the outlook for 2024 remains steady and "relatively strong." For next year, trade growth is expected to sit at 3.3% -- a slight bump from previous estimates of 3.2%.
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Ossa said that various factors contributed to the dip, including "rising inflation and high interest rates," especially in the EU and the U.S. Strained property markets also played a factor in the analysis, along with the war in Ukraine. As for the growth in 2024, the chief economist said that this growth likely will be driven by "increased trade in goods closely linked to the business cycle, such as machinery and consumer durables, which tend to recover when economic growth stabilizes."
Demand for imports "appears to be weakening in manufacturing economies," Ossa said, predicting that import volumes for 2023 will contract by between 0.4% and 1.2% in North America and South America, Europe and Asia. Imports likely will rise in regions that "export fuels disproportionately," the report said.