The global economic downturn, with the WTO downgrading its forecast, sees merchandise trade growth of only 0.8% in 2023.
According to foreign media reports, the latest data from the World Trade Organization (WTO) show that due to persistent inflation, high interest rates, China's real estate market tension and the shadow of the war in Ukraine, the WTO cut its global merchandise trade growth forecast in 2023 by half, from the previous 1.7% to 0.8%. Merchandise trade growth is expected to accelerate to 3.3% in 2024.
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According to WTO data, the slowdown in merchandise trade is widespread, involving more countries and commodities, especially in the fields of steel, office and telecommunications equipment, textiles and clothing. However, car sales in 2023 are a particular exception, showing a surge this year.
The WTO noted that risks to trade growth are relatively balanced, and that possible challenges to the Chinese economy and rising inflation in the US economic recovery have generally kept global interest rates at high levels, which could have a negative impact. However, with regard to the global trade situation, the WTO cautioned that while there are signs of trade fragmentation linked to global tensions, there is currently no evidence that could threaten the broader deglobalisation trends projected for 2024.
The WTO report also noted that indicators of global supply chain activity show that the share of intermediate goods in global trade, including raw materials, fuels, etc., fell to 48.5% in the first half of 2023, compared to an average of 51.0% in the previous three years.
It is unclear whether the decline is due to geopolitical tensions or a general economic slowdown. For the global economy, a slowdown in global trade is expected to be worrying. Because this can put pressure on the living standards of people around the world, especially in poor countries. WTO Director-General Oconjo-Iweara said the fragmentation of the global economy would only make these challenges more acute, so global cooperation was essential.
It is worth noting that this forecast does not include service industry data. The WTO said growth in the services sector is slowing, especially after a strong rebound in international tourism in 2022, with a weaker-than-expected performance in 2023. This suggests that the contribution of the services sector to the global economic recovery has decreased, and more stimulus measures are needed to promote the development of the service sector.
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