The World Trade Organization has revised its forecast for global goods trade in 2024, indicating a slight increase compared to earlier projections. Despite this upward adjustment, the organisation remains cautious due to the potential risks posed by escalating geopolitical tensions and economic policy uncertainties.
According to the Geneva-based WTO, global goods trade is expected to grow by 2.7% this year, up from the previous forecast of 2.6% made in April. However, the projection for next year has been revised down to 3% from 3.3% as stated earlier. The decline in the volume of world merchandise trade by 1.1% last year was attributed to factors such as high inflation and rising interest rates.
The WTO highlighted that ongoing geopolitical tensions and increasing uncertainty in economic policies present significant downside risks to the trade forecast. Despite these challenges, the organisation noted a 2.3% year-on-year growth in global merchandise trade during the first half of this year. Additionally, with inflation decreasing significantly by mid-year, central banks have started to reduce interest rates.
Director-General of the WTO, Ngozi Okonjo-Iweala, emphasised the potential for a gradual recovery in global trade for 2024 but underscored the importance of remaining vigilant against setbacks, especially amid regional conflicts like those in the Middle East. Such conflicts could have ripple effects on global energy costs and shipping routes, impacting not only the countries directly involved but also the broader global trade landscape.
The WTO acknowledged the potential for some limited upside in its forecast if interest rate cuts in advanced economies stimulate stronger growth without sparking inflation. This cautious optimism is tempered by the recognition that uncertainties and challenges persist in the global trade environment, necessitating continued monitoring and proactive measures to mitigate risks and foster sustainable trade growth.