Finance

Russian invasion weakens global trade growth forecast: WTO

Forecasts for global trade growth in 2022 have declined from 4.7 percent to three percent, in large part due to Russia’s invasion in Ukraine, the World Trade Organization (WTO) said on Tuesday.

The WTO said that the Russian invasion in Ukraine is having a major impact on global commodity prices in particular given that Russia and Ukraine are key exporters of fertilizers, energy and food. Ukraine is a top exporter in corn, wheat and sunflower oil. Russia is also a major wheat exporter; together, the two countries account for 29 percent of global wheat sales and the bulk of wheat imports to Middle Eastern nations.

Meanwhile, the top Russian exports to the United States include mineral fuels, platinum, iron and steel, fertilizers and vegetable oils, among other goods.

“The war in Ukraine has created immense human suffering, but it has also damaged the global economy at a critical juncture. Its impact will be felt around the world, particularly in low-income countries, where food accounts for a large fraction of household spending,” WTO Director-General Ngozi Okonjo-Iweala said in a statement. 

Okonjo-Iweala warned that higher prices amid smaller quantities of commodities would have devastating consequences for the world’s poor and said more trade was necessary “to ensure stable, equitable access to necessities.”

“Restricting trade will threaten the wellbeing of families and businesses and make more fraught the task of building a durable economic recovery from COVID‑19,” she added.

The WTO also noted that China’s COVID-19 lockdowns were impacting global trade, specifically seaborne trade, which the organization said could lead to even higher inflation and manufacturing input shortages. 

The United Nations Food and Agriculture Organization reported last week that its price indices for meats, vegetable oils and cereals had reached record levels, the last two of which it attributed in large part to the Russia invasion in Ukraine. 

The assessments come as supply chain issues during the pandemic and inflation contribute to soaring costs.

Tags Ngozi Okonjo-Iweala Russia Russia-Ukraine conflict Ukraine World Trade Organization WTO
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