The Russia-Ukraine war has thrown all predictions made at the turn of the year out of the window. The World Trade Organization (WTO) now expects merchandise trade volume growth of 3.0% in 2022—down from its previous forecast of 4.7%—and 3.4% in 2023, but these estimates are less certain than usual due to the fluid nature of the conflict.
The predictions made by WTO economists were announced on Tuesday.
The highlights
- World GDP at market exchange rates is expected to increase by 2.8% in 2022 after rising 5.7% in 2021. Output growth should pick up to 3.2% in 2023, assuming persistent geopolitical and economic uncertainty.
- The CIS region should see a 12.0% decline in imports and a 7.9% drop in GDP in 2022, but exports should grow by 4.9% as other countries continue to rely on Russian energy. Regional disparities may narrow due to weak import demand in Europe and Asia.
- The volume of merchandise trade rose 9.8% in 2021. The US$ value of this trade grew 26% to US$ 22.4 trillion. The value of commercial services trade was also up 15% in 2021 to US$ 5.7 trillion.
- Services trade will also be affected by the conflict in Ukraine, including in the transport sector, which covers container shipping and passenger air transport.
The reasons: The war is not the only factor weighing on world trade at the moment, a WTO release said. Lockdowns in China to prevent the spread of COVID-19 are again disrupting seaborne trade at a time when supply chain pressures appeared to be easing. This could lead to renewed shortages of manufacturing inputs and higher inflation.
