The World Trade Organization warned that interest rates will drag down exports volumes this year, reports the Financial Times (subscription).
The numbers: “Volumes increased by 2.7 per cent over the course of 2022—a lower than expected figure as the war in Ukraine and sanctions on Russia damaged supply chains still recovering from the early stages of the pandemic.”
- “This year growth is expected to be even slower, at just 1.7 per cent—well below the average level for the past decade of 2.6 per cent.”
Lingering effects: Meanwhile, the pandemic’s aftereffects and continuing geopolitical conflicts will keep weighing on the global economy this year, according to WTO Chief Economist Ralph Ossa.
- “He added that sharp rises in borrowing costs by global central banks over the course of 2022 had also revealed weaknesses in banking systems that could lead to wider financial instability if left unchecked.”
Slight upside: The current WTO growth projection is 1% higher than its October forecast, due to a slight improvement in the outlook. However, trade is “still expected to lag behind broader global growth.”
- “‘It’s not good, but it’s less bad,’ Ngozi Okonjo-Iweala, WTO director-general, told the Financial Times.”
Catch up: In case you missed it, the NAM was in Europe last month, reinforcing the importance of global trade alliances for manufacturing’s strength. NAM President and CEO Jay Timmons met with Director-General Okonjo-Iweala personally.
- ‘“Frank & engaging discussion w/ @JayTimmonsNAM CEO of the US National Association of Manufacturers & his delegation. Focused on geopolitical tensions & impact of @wto, challenges w/ the TRIPS waiver extension to therapeutics & diagnostics, dispute settlement system & road to #MC13 [the WTO’s next ministerial conference in early 2024],” tweeted Okonjo-Iweala following the meeting.