The World Trade Organization (WTO) revised up its forecast for global trade growth this year, but even after the increase, the growth rate is still slowing down compared to last year. The WTO also warned of risks from the Russia-Ukraine war, geopolitical tensions, food security and monetary tightening.

 

The WTO said on the 5th that it expects global merchandise trade volume to grow by 1.7% this year, greater than the 1% forecast in October last year, but smaller than the 2.6% average over the past 12 years since the global financial crisis. Global trade slumped in the fourth quarter of last year, resulting in growth of just 2.7% for the whole of last year, below the original forecast of 3.5%.

 

Growth in merchandise trade should pick up to 3.2 percent in 2024 as the economic expansion picks up pace, the WTO said, but the forecast is fraught with uncertainty amid downside risks. Relevant threats include the Russo-Ukraine war and other geopolitical tensions, renewed inflation, and the impact of tighter monetary policy.

 

The WTO forecast does not include trade in services, but the organization said international tourism is on track for a full recovery as restrictions on the outbreak are lifted and travel demand does not appear to be hit by economic uncertainty. The unblocking of mainland China should also boost regional and global tourism; Chinese tourists are the largest consumer in the world.

 

In addition, data released by the U.S. Department of Commerce on the 5th showed that the U.S. trade deficit unadjusted for inflation expanded for three consecutive months in February, and the gap between imports and exports increased by 2.7%, reaching a deficit of 70.5 billion U.S. dollars, the highest in four months. That exceeded the $68.8 billion forecast by Bloomberg Intelligence.

 

(Source: money.udn0405)