WTO Raises Global Trade Volume Forecast

GENEVA (Reuters) – The World Trade Organization (WTO) has upgraded its global trade volume forecast for this year, predicting 3% growth in 2025, contingent on stable conditions in the Middle East.

Global trade is rebounding in 2024 after a downturn in 2023 due to high inflation and interest rates. Initially, the WTO projected a 2.6% rise in April but has now adjusted this to 2.7%.

WTO Director-General Ngozi Okonjo-Iweala emphasized the need for vigilance amidst potential regional conflicts, like those in the Middle East, which could severely impact affected countries and global energy costs, as well as shipping routes.

Ongoing conflicts, such as Israel's recent actions in Lebanon and the conflict with Hamas in Gaza, have raised concerns about an escalating regional war.

The WTO noted that differing monetary policies among major economies pose a downside risk, potentially causing financial instability and affecting capital flows, complicating debt servicing for poorer nations.

However, there may be limited upside potential if rate cuts in advanced economies lead to unexpectedly robust growth without triggering inflation.