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WTO slashes 2022 global trade growth forecast to 3% from 4.7% due to Ukraine war, covid

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The World Trade Organization (WTO) on Tuesday revised downward its forecast for global trade growth this year to 3 per cent from 4.7 per cent because of the impact of the Russia-Ukraine war and warned of a potential food crisis caused by surging prices.

The report from the global trade watchdog said the conflict, now in its seventh week, had damaged the world economy at a critical juncture as the coronavirus pandemic – and Chinese lockdowns specifically – continues to weigh on the recovery.

“The economic reverberations of this conflict will extend far beyond Ukraine’s borders,” WTO Director-General Ngozi Okonjo-Iweala told a news conference presenting the findings.

“It’s now clear that the double whammy of the pandemic and the war has disrupted supply chains, increased inflationary pressures and lowered expectations for output and trade growth.”

The Geneva-based body forecasts global trade growth in 2023 would inch up to 3.4 per cent, noting that both 2022 and 2023 estimates are less certain than usual due to uncertainty about the conflict.

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Okonjo-Iweala also warned of a potential food crisis because of disruptions to exports from Ukraine and Russia, both major suppliers of grains and other commodities, that could hit poor countries, including some 35 African importers, the hardest.

“This is why we need to act and act decisively on this issue of food in order to avoid food riots,” she said, citing the need for more transparent monitoring systems and potential releases of buffer stocks to lower prices.

She urged countries to remain committed to the multilateral trading system to stave off the risk of it splitting into two spheres. “I think the costs to the global economy will be quite significant if we do that,” she said.

WTO chief economist Robert Koopman said there was an “extremely difficult set of circumstances in the world economy” but said trade remained resilient and that warnings of the end of globalisation were unfounded.

“So far there’s been no evidence of reshoring,” he said.

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