World Trade Organisation raises goods trade forecast but warns of risks

The World Trade Organisation (WTO) on Thursday slightly increased its forecast for global goods trade growth in 2024, but remains cautious about potential setbacks. In its latest report, the WTO projected that global merchandise trade will expand by 2.7 per cent this year, up from the previous estimate of 2.6 per cent. However, the organisation warned that rising geopolitical tensions and economic policy uncertainty could pose significant risks to this forecast.

Despite these concerns, the WTO noted a positive trend in the first half of 2024, with global merchandise trade increasing by 2.3 per cent year-over-year. The decline in inflation rates has also allowed central banks to begin cutting interest rates, which could further support trade growth.

“We are expecting a gradual recovery in global trade for 2024, but we remain vigilant of potential setbacks, particularly the potential escalation of regional conflicts like those in the Middle East.” WTO Director-General Ngozi Okonjo-Iweala said.

“The impact could be most severe for the countries directly involved, but they may also indirectly affect global energy costs and shipping routes. Beyond the economic implications, we are deeply concerned about the humanitarian consequences for those affected by these conflicts.”

The WTO’s forecast also includes a limited upside potential, depending on the effectiveness of interest rate cuts in advanced economies. If these cuts lead to stronger-than-expected growth without reigniting inflation, global trade could experience a more robust recovery.

Attribution: The World Trade Organisation