WTO ups forecasts for global trade, but warns Covid risks remain

The Word Trade Organization has hiked its forecasts for the global trade in goods, but warned that downside risks from the pandemic and vaccine inequity in particular remained.
The global trade body expects world merchandise trade volume to grow 10.8% this year, up from its forecast for growth of 8.0%, made in March.

That growth is anticipated to moderate in the following year, improving by 4.7%, up from 4.0% predicted previously.

“Growth should moderate as merchandise trade approaches its pre-pandemic long-run trend,” the WTO said.

“Supply-side issues such as semiconductor scarcity and port backlogs may strain supply chains and weigh on trade in particular areas, but they are unlikely to have large impacts on global aggregates.”

Instead, it said, “the biggest downside risks come from the pandemic itself”.

Ngozi Okonjo-Iweala, WTO director general, said: “Trade has been a critical tool in combatting the pandemic, and this strong growth underscores how important trade will be in underpinning the global economic recovery.

“But inequitable access to vaccines is exacerbating economic divergence across regions. The longer vaccine inequality is allowed to persist, the greater the chance dangerous variants of Covid-19 will emerge, setting back the health and economic progress we have made to date.”

Quarterly trade rose 22.0% year-on-year in the second quarter, but the WTO expects that to slow to 6.6% by the fourth quarter, reflecting 2020’s drop and recovery. Global GDP is forecast to growth by 5.3%, up from 5.1% forecast earlier in the year, moderating to 4.1% in 2022. The WTO had previously forecast GDP growth of 3.8% in 2022.

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