The World Trade Organization (WTO) warned on Tuesday that Russia’s war in Ukraine had harmed global trade prospects and that the global economy could be split into opposing blocs as a result of the conflict.
The World Trade Organization has predicted that the war will stymie global trade growth this year, as well as global GDP growth. WTO Director-General Ngozi Okonjo-Iweala told a press conference at the global trade body’s headquarters in Geneva, “This is not the moment to turn inside.”
“In times of crisis, more commerce is required to maintain steady and fair access to essentials.” Restricting trade will jeopardize the well-being of people and businesses, making the challenge of constructing a long-term economic recovery from Covid19 much more difficult.” In the face of rising inflation pressures on basic goods and expanding supply chain issues, the former Nigerian foreign and finance minister said countries and international organizations must work together to facilitate trade.
“History shows us that separating the global economy into rival blocs and turning our backs on the world’s poorest countries leads to neither prosperity nor peace,” Okonjo-Iweala added. According to the World Trade Organization, global GDP is predicted to grow by 2.8 percent in 2022, down 1.3 percentage points from the prior prediction of 4.1 percent, following a 5.7 percent gain in 2021.
In 2023, growth should reach 3.2 percent, close to the three percent averaged between 2010 and 2019. The WTO now forecasts a three percent increase in merchandise trade volume in 2022, down from a previous prediction of 4.7 percent, and then a 3.4 percent increase in 2023.
‘An enormous amount of human pain: WTO’
“Not only has the conflict in Ukraine caused great human suffering, but it has also harmed the world economy at a vital point.” It will have a global impact, particularly in low-income nations where food makes up a substantial portion of the household budget,” Okonjo-Iweala said.
“With dwindling supplies and rising food prices, the world’s poor may be forced to go hungry.” This must not be let to occur.” Western sanctions against Russian enterprises and individuals, according to the WTO, are likely to have a significant impact on commercial services trade.
The European Union accounted for over 42% of Russia’s service imports and 31.1 percent of its service exports in 2019. “Prior to the epidemic, Russia’s most traded services were travel/tourism and air transport services, accounting for 46 percent of its exports and 36 percent of its imports,” according to the WTO.
“Economic sanctions may have a significant impact on these services, which have already been touched hard by the pandemic.” The World Trade Organization (WTO) stated that the conflict in Ukraine was not the only factor affecting global trade at the moment. Lockdowns in China to prevent the spread of Covid-19 were impeding seaborne trade once again at a time when supply chain tensions appeared to be lessening, according to the report. “This could result in new manufacturing input shortages and increased inflation,” it said.