World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala said on January 18 that she was not optimistic about the global trade situation this year. Speaking to reporters while attending the World Economic Forum (WEF) Annual Meeting in Davos, Ngozi Okonjo-Iweala said that global economic growth was weaker due to “increasing geopolitical tensions, new disruptions that the WTO has seen in the Red Sea, in the Suez Canal, the Panama Canal.” According to her, this means that the WTO feels “less optimistic.”
The WTO had forecast trade to grow by 0.8% last year and 3.3% this year. However, that was before the Middle East conflict and recent geopolitical developments. Ngozi Okonjo-Iweala warned that future forecasts would be lower this year. The vital trade route has been disrupted by Houthi attacks on shipping in the Red Sea, and the worst drought in decades in the Panama Canal. The WTO director-general said she hoped the Middle East conflict could end soon, but warned that it could have a “really big impact” on already weak global trade flows if the conflict spreads across the region.
Ms Okonjo-Iweala also said that conflict in the Middle East could add to the already-existing trade-growth-dampening factors, such as higher interest rates, the Chinese property market freeze and the conflict in Ukraine. “We hope that this will end soon and all the conflicts will stop,” Ms Okonjo-Iweala added. “Our biggest fear is that the conflict in the Middle East will spread to the whole region, because that would have a really big impact on trade. Everyone is worried and hoping for the best.”
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