The World Trade Organization (WTO) forecasts a slowdown in world trade growth in 2022 from the previously expected 4.7% to 2.4-3%. This is stated in the report of the WTO Secretariat published on Monday in Geneva.
“This crisis could lead to a reduction in global GDP growth rates by 0.7 to 1.3 percentage points, and the increase will be between 3.1% and 3.7%,” the WTO secretariat said. . “According to this simulation, the growth rate of global trade this year could be reduced by almost half: from 4.7%, which is discussed in the forecasts of October last year, to 2.4 – 3%”, they said. specified the experts.
According to them, the reduction in trade and production is likely to be felt by the world’s population due to “higher food and energy prices, as well as declining availability of goods exported by Russia and Ukraine.” At the same time, low-income per capita states are at “high risk” because they spend a larger share of their income on food than rich countries. “This could have an impact on political stability,” experts warned.
They recalled that Russia and Ukraine are major suppliers of “essential products”, especially food and energy. “Europe, which is the main destination for Russian and Ukrainian exports, is likely to bear the brunt of the economic consequences,” he said. At the same time, the report calls Africa and the Middle East “vulnerable regions” because they import more than half of the grain they need from Russia and Ukraine.
The WTO has warned of a “long-term risk” from the events in Ukraine: a possible “disintegration of the global economy into separate blocs.” “Economic sanctions may lead to large economies moving towards ‘dissociation’ from each other, based on geopolitical calculations in order to achieve greater self-sufficiency in production and trade,” experts say. In their view, even if there are no new “official blocs” in the world, “private players” may try to “minimize risks by reorienting supply chains.”
The WTO Secretariat emphasized that, in the current situation, “a multilateral trading system based on cooperation” is of great importance.
The authors of the report argue that “keeping markets open” allows all countries to take advantage of “economic opportunities.”
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