Ukraine war could halve global trade growth this year: WTO
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GENEVA • Russia's war in Ukraine could almost halve world trade growth this year and drag down global gross domestic product (GDP) growth, the World Trade Organisation (WTO) has projected.
The WTO said on Monday that the Russian invasion had not only created a humanitarian crisis of "immense proportions", but also dealt a "severe blow" to the global economy.
It also said that in the longer term, the conflict could even spark a disintegration of the global economy into separate blocs.
The Geneva-based global trade body issued its first analysis of the impact of the war ahead of its annual world trade forecast report yesterday.
It said that while the shares of Russia and Ukraine in overall world trade and output are relatively small, they are important suppliers of essential products, notably food and energy.
"Using a global economic simulation model, the secretariat projects that the crisis could lower global GDP growth by 0.7 to 1.3 percentage points, bringing growth to somewhere between 3.1 per cent and 3.7 per cent for 2022," the WTO said.
"The model also projects that global trade growth this year could be cut almost in half from the 4.7 per cent the WTO forecast last October to between 2.4 per cent and 3 per cent."
The Russia-Ukraine war is grinding towards its seventh week.
The WTO said that some regions would be more strongly affected by the war than others. Europe is the main destination for both Russian and Ukrainian exports and therefore is likely to experience the heaviest economic impact.
Reduced shipments of grains and other foodstuffs will boost the prices of agricultural goods, with negative consequences for food security in poorer regions, it added.
Africa and the Middle East are the most vulnerable, as they import more than 50 per cent of their cereal needs from Ukraine and/or Russia.
AGENCE FRANCE-PRESSE
