World trade will lose momentum in the second half of this year and will continue to do so in 2023 due to disturbances that weigh today on the world economy, such as the war in Ukraine, according to WTO projections.
The World Trade Organization (WTO) warned against imposing trade restrictions that would ultimately result in slower growth and lower living standards.
The volume of world merchandise trade is estimated to grow by 3.5 per cent in 2022, up slightly from the three per cent forecast in April, however the volume will slow to one per cent next year, which represents a strong decrease compared to the 3.4 previously estimated.
In relation to the demand for imports, a weakening is expected as growth slows in the main economies for different reasons, according to the WTO.
For Europe, high energy prices resulting from the Ukrainian conflict will reduce household spending and increase manufacturing costs.
In the United States, the tightening of monetary policy will affect spending in areas where interest rates count, such as housing, motor vehicles and fixed investments.
China is also affected by the Covid-19 outbreaks and production disruptions, along with weak external demand.
Meanwhile, developing countries could face food insecurity and debt difficulties as import bills for fuel, food and fertilizer rise.
Overall, energy prices soared 78 percent year-on-year in August, food prices rose 11 percent, grain prices 15 percent and fertilizer prices 60 percent.
In addition, many currencies have fallen against the dollar in recent months, another factor that makes groceries and fuel more expensive.