THE World Trade Organization (WTO) said it revised downward its 2022 forecast of volume growth for global merchandise trade volume to 3.0% from 4.7%, and global gross domestic product (GDP) growth to 2.8% from 4.1%, due to the impact of the Russia-Ukraine war on food security in developing countries.
In 2023, the corresponding forecasts for trade volume and GDP growth were 3.4% and 3.2%.
In a briefing on Tuesday, WTO economists noted that Russia and Ukraine are key suppliers of wheat, fertilizer, and energy.
“The economic reverberations of this conflict will extend far beyond Ukraine’s borders. It is 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,” said WTO Director-General Ngozi Okonjo-Iweala.
WTO economists conducted simulations that incorporated damage to Ukrainian infrastructure, sanctions on Russia, and declining aggregate demand caused by dampened business and consumer confidence.
“A potential food crisis is looming. Food and energy prices were already high by historical standards before the war,” she added.
Imports and GDP for the Commonwealth of Independent States are expected to contract by 12.0% and 7.9% respectively, while exports are projected to climb by 4.9% on continued reliance on Russian energy.
The 2022 merchandise trade volume growth projections, which range from a worst case of 0.5% and 5.5% at most, are scheduled for review in October. — Ram Christian S. Agustin