High inflation and borrowing costs, supply disruptions are weakening global demand for exports and imports
The WTO expects exports and imports to increase by 1% in 2023, down from a forecast of 3.4%.
Tweet on global slowdown, recession very likely, WTO
Trade growth to slow sharply in 2023 as global economy faces strong headwinds!
— The_Journalbiz (@the_journalbiz) October 6, 2022
WTO chart on global slowdown
World trade in goods is projected to slow sharply next year under the weight of high energy prices, rising interest rates and war-related disruptions, raising the risk of a global recession, according to a new forecast.
Total exports and imports of goods are likely to grow by just 1% in 2023, the World Trade Organization said on Wednesday. That would be down from its previous forecast of 3.4% and its forecast of 3.5% for this year.
The WTO also lowered its forecast for global economic growth in 2023 to 2.3% from earlier expectations of 3.3%, and warned of an even sharper slowdown should central banks raise interest rates too sharply in their efforts to tame high inflation.
- The report follows multiple signs that global economic growth is weakening.
“The global economy faces a multipronged crisis,” Ngozi Okonjo-Iweala, director-general of the WTO, the Geneva-based body responsible for enforcing the rules that govern global trade, told reporters in a news conference. “The picture for 2023 has darkened considerably.”
The U.S. trade picture in August reflected the broad slowdown in demand. Exports of goods dropped 0.3% in August from the previous month, the first decline since January, the Commerce Department said Wednesday. Goods imports fell 1.5% during the same period.
*The strong dollar makes imports cheaper for U.S. consumers while making American products more expensive for foreign buyers.