WTO warned that export volumes will slow.

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.

www.sba.tax

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