"Wall Street Journal": after it was at 3.3%

“World Trade” lowers its forecast for global economic growth in 2023 to 2.3%

"World Trade" expected that the overall growth rate of world exports and imports of goods would reach only 1% during the next year.

archival

The World Trade Organization expected that the overall growth rate of world exports and imports of goods will reach 1% during the next year.

This is lower than its previous forecast, which was 3.4% in 2023, and 3.5% for the current year.

The organization also expected that the movement of global trade in goods will slow over the next year, under the weight of increased interest rates and the turmoil associated with the Ukraine war, which increases the risks of a global recession.

And the "World Trade" reduced its forecast for global economic growth in 2023 to about 2.3% from the previous forecast, which was at 3.3%.

The organization warned of a slowdown in the event of raising interest rates further as part of its efforts to curb inflation rates.

"The global economy is facing a multi-pronged crisis," said WTO Director-General Ngozi Okonjo-Iweala.

The director of the Geneva-based organization, which is responsible for enforcing the rules that govern the global trade framework, added that the trade slowdown could help ease price pressures by further improving supply chains and reducing transportation costs.

The US Federal Reserve is aggressively raising interest rates to combat inflation by limiting hiring, spending and investment.

The American newspaper "The Wall Street Journal" reported that these moves contributed to weakening demand and economic activity in the United States and many other countries, as some economists and policy makers are concerned that rates may rise above required and cause a recession.

The demand for goods was rising in late 2020 as global economies recovered from the disruptions of "Covid-19", which led to an increase in the volume of trade in 2021.

But now signs of a slowdown in global trade abound in Asia and Europe.

The picture for US trade in August reflected the broad slowdown in demand.

The US Commerce Department said that merchandise exports fell 0.3% in August from the previous month, the first decline since January, and merchandise imports fell 1.5% during the same period.

With imports falling more than exports, the country's trade deficit narrowed by 4.3% last month, as a strong dollar makes imports cheaper for US consumers while making US products more expensive for foreign buyers.

The Wall Street Journal indicated that since the beginning of this year, US energy companies have benefited from higher prices and an increase in US exports of oil and natural gas resulting from the trade disruptions related to the Russian-Ukrainian war.

For its part, the South Korean Ministry of Commerce announced that the country's exports grew at an annual rate of 2.8% last September, the weakest performance since October 2020.

While in China, the world's second largest economy, the export boom is waning due to the pandemic.

China's demand for imports from its neighbors is also declining, as its economy operates under severe real estate pressure and the government's "zero Covid" policy.

In Europe, its exports to Russia declined as a result of the sanctions imposed on Moscow, according to the European Union's statistics agency, but European exports to the United States grew rapidly.

main factor

The annual inflation rate in the Group of 20 major economies held steady at 9.2% in the June-August period, the Organization for Economic Co-operation and Development said, and shipping costs have fallen rapidly in recent months.

"Probably the main factor behind this is the easing of demand for goods," said Kiki Sund, an economist at Oxford Economics.

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