Comments
Global trade in goods is likely to grow by 1.7 per cent in 2023, following a 2.7 per cent growth in 2022, hit by the effects of the long-drawn war in Ukraine, high inflation, tighter monetary policy and financial market uncertainty, per fresh estimates made by the WTO.
The revised growth projection is, however, better than the 1 per cent growth estimated earlier by the WTO, as the relaxation of Covid-19 restrictions in China has improved expectations, the WTO’s Global Trade Outlook & Statistics released on Wednesday pointed out.
“Global trade growth in 2023 is still expected to be sub par despite a slight upgrade to GDP projections since last fall,” the report noted.
Rough fiscal
Real global GDP growth at market exchange rates is estimated at 2.4 per cent for 2023 against 2.3 per cent predicted earlier.
While the new estimates are a marginal improvement over the earlier ones shared in October 2022, projections for both trade and output growth are below the averages for the past 12 years of 2.6 per cent and 2.7 per cent respectively.
For Indian exporters, who have been fighting a demand slowdown since July last year and may just about manage to slightly exceed FY2022 exports of $422 billion in FY2023, the going is likely to continue to be rough in the new fiscal.
“The Commerce and Industry Ministry is yet to make an export projection for FY24 as the global situation continues to be fluid. It is work in progress,” a source said.
What is of particular concern is the downward projection of global trade growth in 2022 to 2.7 per cent, from 3.5 per cent predicted earlier, pulled down mainly by a sharp deterioration in the fourth quarter (of the calendar year), the report noted.
Factors
“Several factors contributed to that slump, including elevated global commodity prices, monetary policy tightening in response to inflation, and outbreaks of Covid-19 that disrupted production and trade in China,” it stated.
Trade continues to be a force for resilience in the global economy, but it will remain under pressure from external factors in 2023,said WTO Director General Ngozi Okonjo-Iweala.
“This makes it even more important for governments to avoid trade fragmentation and refrain from introducing obstacles to trade,“ she added.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.