WTO foresees fragile global economy amid Russia-Ukraine conflict

0 Comment(s)Print E-mail Xinhua, April 12, 2022
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Photo taken on July 15, 2020 shows an exterior view of the World Trade Organization (WTO) headquarters in Geneva, Switzerland. [Photo/Xinhua]

The outlook for the global economy has darkened since the outbreak of the Russia-Ukraine conflict, the World Trade Organization (WTO) said in its annual trade statistics and outlook report published on Tuesday.

Global gross domestic product (GDP) at market exchange rates is projected by the WTO to grow by 2.8 percent in 2022, down 1.3 percentage points from the previous forecast of 4.1 percent. Growth is expected to pick up to 3.2 percent in 2023, close to the average rate of 3.0 percent between 2010 and 2019.

The organization expects world merchandise trade volume to grow by 3.0 percent in 2022, down from its previous forecast of 4.7 percent. The growth rate is estimated at 3.4 percent for 2023, but these projections are less certain than usual due to the fluid nature of the Russia-Ukraine conflict.

The most immediate economic impact of the crisis has been a sharp rise in commodity prices, the report said.

It stressed that Russia and Ukraine are both key suppliers of essential goods, such as food, energy and fertilizers. Grain shipments through Black Sea ports have already been halted, with potentially dire consequences for food security in poor countries.

In 2022, output in the Commonwealth of Independent States (CIS) region -- which excludes Ukraine -- is expected to see a sharp 7.9 percent drop, leading to a 12.0 percent contraction in the region's imports.

According to Ngozi Okonjo-Iweala, director general of the WTO, the military conflict has "damaged the global economy at a critical juncture. Its impact will be felt around the world, particularly in low-income countries, where food accounts for a large fraction of household spending."

"This is not the time to turn inward. In a crisis, more trade is needed to ensure stable, equitable access to necessities. Restricting trade will threaten the wellbeing of families and businesses and make more fraught the task of building a durable economic recovery from COVID-19," she said.

Okonjo-Iweala called on governments and multilateral organizations to work together to facilitate trade at a time of sharp inflationary pressures on essential supplies and growing pressures on supply chains.

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