The World Trade Organization (WTO) on Tuesday revised its forecast for global trade growth this year down to 3% from 4.7% due to the impact of the Russia-Ukraine war and warned of a possible food crisis due to rising prices.
The global trade regulator’s report says the conflict, now in its seventh week, has hurt the global economy at a critical juncture as the coronavirus pandemic – and Chinese lockdowns in particular – continue to weigh on the recovery.
“The economic impact of this conflict will go well beyond Ukraine’s borders,” WTO Director-General Ngozi Okonjo-Iweala said at a news conference unveiling the findings.
“It is now clear that the double whammy of the pandemic and war has disrupted supply chains, increased inflationary pressures and lowered expectations for output and trade growth.”
The Geneva-based body forecasts global trade growth would rise to 3.4% in 2023, noting that both 2022 and 2023 estimates are less certain than usual due to uncertainty about the conflict.
Ms Okonjo-Iweala also warned of a possible food crisis due to disruptions in exports from Ukraine and Russia, both major suppliers of grain and other commodities that could hit poor countries, including some 35 African importers, hardest.
“Therefore we need to act decisively on this food issue and act to avoid food riots,” she said, citing the need for more transparent monitoring systems and potential releases of buffer stocks at lower prices.
She urged countries to remain committed to the multilateral trading system to stave off the risk of a split in two. “I think the cost to the global economy will be quite high if we do that,” she said.
WTO chief economist Robert Koopman said there were “extremely difficult circumstances in the global economy” but trade remained robust and warnings of the end of globalization were unfounded.
“So far there is no evidence of a restructuring,” he said.
