World Trade Organization Director-General Ngozi Okonjo-Iweala casts doubt on the global 2024 trade forecast, singling out escalating Red Sea tensions as a major disruptor.
At the World Economic Forum in Davos, Okonjo-Iweala highlighted the combined impact of sluggish global economic growth and disruptions across vital trade routes, including the Red Sea, Suez Canal, and Panama Canal. This mix of factors contributes to a gloomier outlook for international trade.
The WTO’s earlier optimistic projections of 0.8% growth for 2023 and 3.3% for 2024 are now overshadowed by recent Middle East conflicts, notably the October Hamas attack on Israel and the ensuing Gaza war. These developments force a reassessment of growth expectations, with lower rates now anticipated.
Okonjo-Iweala pointed out significant risks to the prior 3.3% growth prediction in merchandise volumes. Upcoming revised estimates are likely to reflect a downturn from previous hopes.
Yemeni rebels’ assaults on Red Sea shipping lanes have severely disrupted a key global trade route. The Huthi rebels’ strikes, declared as solidarity acts with Palestinians in Gaza, have extended their impact beyond regional commerce, compelling shipping diversions from the Suez Canal.
Adding to the strain on global trade, the Panama Canal grapples with its worst drought, leading to enforced transit reductions.
The human toll of the Middle East conflict is stark. The Hamas attack on October 7 led to about 1,140 deaths in Israel, mostly civilians, per an AFP tally based on official data. Gaza’s conflict, as reported by the Hamas government’s Health Ministry, has resulted in over 24,400 Palestinian deaths, many being women and children, since the start of Israeli bombardments and ground offensives on October 7.
With world leaders gathered in Davos to deliberate on these pressing issues, the need for strategic responses to ease geopolitical tensions and secure critical trade routes is urgent. The WTO’s forthcoming forecasts will provide deeper insights into the economic impacts of these multifaceted global challenges.
BUSINESS GENERAL | Paraguay’s Trade Triumph: A Positive Balance and Israeli Promise
