Foreign trade is too difficult this year! The global trade growth forecast in 2023 has been "cut in half"! The latest forecast from the WTO...

Currently, the global economy has been hit by multiple shocks and demand continues to be sluggish. Factors such as sluggish external demand and geopolitics have posed greater challenges to the development of foreign trade in various countries. As a result, the import and export data of most countries have shrunk to varying degrees...

WTO cuts 2023 global trade growth forecast in half
The World Trade Organization (WTO) recently cut its forecast for global trade growth in 2023, predicting that global merchandise trade volume will grow by 0.8% this year, less than half of its April forecast (1.7% growth).

The WTO explained in its latest trade forecast released on the 5th that due to the continued downturn in global trade starting in the fourth quarter of 2022, WTO economists have scaled back their forecasts for global merchandise trade growth in 2023.

At the same time, the WTO expects global merchandise trade growth to be 3.3% in 2024, which is still basically the same as the previous estimate. The WTO also predicts that global real gross domestic product (GDP) will grow by 2.6% in 2023 and 2.5% in 2024 at market exchange rates.

Previously, the International Monetary Fund (IMF) estimated that global economic growth is expected to slow until the end of 2024, with its July view slightly more optimistic than its April forecast. The IMF predicts that global real GDP will grow by 3.0% in 2023 and 2024 respectively.

WTO Director-General Ngozi Okonjo-lweala said: “The expected slowdown in trade in 2023 is worrying as it will adversely affect the living standards of people around the world. A fragmented global economy will only make these challenges more severe. grim, which is why WTO members must seize the opportunity to strengthen the global trade framework by avoiding protectionism and promoting a more resilient and inclusive global economy. Without a stable, open, predictable, rule-based Without a fair and equitable multilateral trading system, the global economy, especially poor countries, will find it difficult to recover.

Global trade slows down! Involving many countries and many commodities
Global trade and output suddenly slowed in the fourth quarter of 2022 as the United States, the European Union and other regions felt the impact of persistent inflation and tight monetary policy. These developments, coupled with geopolitical factors, cast a shadow on the trade outlook..

The WTO expects trade growth this year to be 0.8% and GDP growth to be 2.6%. Next year, trade growth will be 3.3% and GDP growth will be 2.5%.

This means that trade growth will be slower than GDP growth this year, but trade growth will be faster than GDP growth next year. The WTO explained that such fluctuations are not unusual given the relatively large share of trade in investment and durable goods that are sensitive to business cycles.

The WTO said the trade slowdown appears to be broad-based and involves many countries and a variety of goods, particularly certain manufactured goods such as steel, office and telecommunications equipment, textiles and clothing. But one notable exception is passenger cars, whose sales surge in 2023.

The WTO said the exact cause of the slowdown was unclear, but inflation, high interest rates, a rising dollar and geopolitical tensions were all factors contributing to the slowdown.

The WTO also stated in the report that inflation and commodity prices will have a significant impact on the development of regional trade volume. In the first half of 2023, North America had the fastest export growth among all regions, with a year-on-year growth of 5.4%, followed by South America (1.4%), Africa (0.9%), Europe (0.5%), and North America ( 0.5%), South America (1.4%) and Africa 0.9%). Asia's export growth is expected to turn positive in the second half of the year, while Europe's export growth is expected to turn negative, the WTO said.

In terms of imports, Asia's imports in the first half of 2023 fell by 2.3% year-on-year, but China's imports actually increased by 2.0%. Among other Asian countries, Malaysia fell by 5.6% year-on-year. Thailand dropped 10.3% year-on-year, etc. At the same time, U.S. imports and EU imports fell by 3.7% and 4.0% respectively.

It should be explained that global commercial services trade is not within the scope of this WTO forecast. However, preliminary data suggests that growth in the transport and travel industry may be slowing after a strong rebound last year. In the first quarter of 2023, global commercial services trade increased by 9% year-on-year, while in the second quarter of 2022 it increased by 19% year-on-year.

In addition, the WTO said the trade slowdown appears to be broad-based, involving many countries and commodities. The WTO also predicts that trade growth should pick up in 2024, along with slow but steady GDP growth. However, the WTO also warned that signs of supply chain fragmentation are beginning to appear, which may threaten the relatively optimistic outlook for 2024.