WTO worsens global GDP growth forecast for 2022 to 2.8%

GENEVA, Apr 12 (PRIME) -- The World Trade Organization (WTO) has worsened its 2022 global gross domestic product (GDP) growth forecast to 2.8% from 4.1% on the fallout the conflict in Ukraine, the organization said in a report published on Tuesday.

In 2023, the growth should speed up to 3.2%.

The downgrade reflects direct impact of the conflict, including destruction of infrastructure, higher costs of trade, the impact of the anti-Russian sanctions as well as disconnection of Russian banks from the SWIFT interbank messaging system, and the decrease of combined demand in the other parts of the world due to lower business and consumer confidence and rising uncertainty.

The GDP of countries that comprise the CIS excluding Ukraine should shrink by 7.9% in 2022, leading to the region’s imports falling by 12%. But exports of the countries should grow by 4.9% as the third countries would continue using Russia’s energy sources, the WTO said.

The organization’s expectation of the global trade’s increase this year was also revised to 3% from 4.7% on the Ukrainian conflict and the quarantine China introduced due to the continuous outbreak of the COVID-19 coronavirus. The quarantine again disrupts the international sea trade, which could lead to a new deficit of production resources and higher inflation.

The WTO also said quoting Director General Ngozi Okonjo-Iweala that poor countries would suffer from the toughest consequences of the conflict in Ukraine as people spend a significant share of their incomes on food there. The high food prices will force the people to try to make do without food, which is unacceptable. The world has to expand international trade to ensure consistent and fair access to the necessities, she said, as quoted by the WTO.

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