Geopolitical tensions may hinder the growth of global trade in 2024-2025 — WTO

"World trade in goods is expected to gradually recover this year after the recession of 2023 caused by the continuing effects of high energy prices and inflation," the WTO noted. According to the forecast, "the volume of world trade in goods should increase by 2.6% in 2024 and by 3.3% in 2025 after falling by 1.2% in 2023." At the same time, "regional conflicts, geopolitical tensions and uncertainty of economic policy create significant risks of deterioration of the forecast."

Experts do not rule out, in particular, a jump in food and energy prices "due to geopolitical events." In a special analytical section of the report on the crisis in the Red Sea region, it is noted that although the economic consequences of disruptions to the Suez Canal caused by the Middle East conflict have so far been relatively limited, some industries such as automotive, fertilizer production and retail have already suffered "due to delays and increased costs transportation". At the same time, geopolitical tensions at the moment "have not caused a steady trend towards deglobalization."

WTO Chief Economist Ralph Ossa said that "some governments have become more skeptical about the benefits of trade and have taken steps to shift production and reorient trade towards friendly countries." The sustainability of trade is being tested due to disruptions on two major global shipping routes - the Panama Canal and the Red Sea. In the face of disruptions, geopolitical tensions and political uncertainty, "the risks to the prospects for trade are shifted to the downside," Ossa concluded.