The World Trade Organization (WTO) has slashed its forecast for global trade growth in 2023, warning of a “broad-based” slowdown. The WTO now expects trade volumes to grow by just 1%, down from its previous estimate of 3.4%. This comes just one day after the United Nations Conference on Trade and Development (UNCTAD) warned that central banks are at risk of triggering a full-blown global recession.
The WTO attributed the slowdown in trade to a number of factors, including the ongoing war in Ukraine, high energy prices, rising inflation, and monetary tightening by central banks. These factors are weighing on economic growth and demand around the world, which is having a knock-on effect on trade.
The WTO’s warning is a sign that the global economy is facing significant challenges. The slowdown in trade could have a negative impact on businesses and workers around the world. It is important for governments and policymakers to take steps to mitigate the risks and support the global economy through this difficult period.
Here are some things that governments and policymakers can do to mitigate the risks of a global trade slowdown:
Provide support to businesses. Governments can provide financial assistance, tax breaks, and other forms of support to businesses that are struggling due to the slowdown in trade.
Reduce trade barriers. Governments can reduce or eliminate tariffs and other trade barriers to make it easier for businesses to trade across borders.
Invest in infrastructure. Governments can invest in infrastructure, such as roads, ports, and airports, to make it easier and more efficient to move goods and services around the world.
Support multilateralism. Governments can support multilateral institutions, such as the WTO, that work to promote free and fair trade.
It is also important for businesses to take steps to prepare for a slowdown in trade. Businesses can diversify their markets, develop new products and services, and invest in new technologies to make themselves more competitive.