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WTO warned that export volumes will slow.

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The World Trade Organ­iz­a­tion has warned that growth in export volumes will slow this year as rising interest rates and fin­an­cial instabil­ity weigh on an envir­on­ment already hit by a revival of pro­tec­tion­ism.

Volumes increased by 2.7 per cent throughout 2022, a lower than expec­ted fig­ure as the war in Ukraine and sanc­tions on Rus­sia dam­aged sup­ply chains still recov­er­ing from the early stages of the pan­demic. This year, growth is expec­ted to be even slower at just 1.7 per cent, well below the aver­age level for the past dec­ade of 2.6 per cent.

«The linger­ing effects of Covid-19 and the rising geo­pol­it­ical ten­sions were the main factors impact­ing trade and out­put in 2022, and this is likely to be the case in 2023 as well,» said Ralph Ossa, chief eco­nom­ist of the WTO.

«It’s not good, but it’s less bad,» Ngozi Okonjo-Iweala, WTO dir­ector-gen­eral, told the Fin­an­cial Times.

Okonjo-Iweala said the upgrades fol­lowed the eas­ing of sup­ply chain dis­rup­tions in recent months. In addition, the loosen­ing of lock­downs in China was also expec­ted to unleash pent-up con­sumer demand, increas­ing inter­na­tional trade.

While con­cerns last year that the war would hit food trade in Ukraine proved over­blown after coun­tries found altern­at­ive sources, the WTO remains wor­ried that the con­flict could lead to fam­ine.

«The best thing to help us feel more secure is for the war in Ukraine to end,» the WTO dir­ector-gen­eral said. «If we have a crop fail­ure in a major pro­du­cing region in the world, that could cre­ate prob­lems of food secur­ity».

«One in five cal­or­ies con­sumed in the world is traded. So trade has been a force for resi­li­ence in the world, and that’s why it’s import­ant to keep a free trade flow,» Okonjo-Iweala said.

Ethiopia, which relies on dis­rup­ted Black Sea exports for almost half its wheat, had found sup­plies from Argen­tina and the US. As a result, Turks switched from eat­ing wheat to rice.

While the out­look for trade in goods was pess­im­istic, ser­vices exports per­formed bet­ter. Ser­vices trade rose 15 per cent by value in 2022 com­pared with 2023.

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