WTO "World Trade Growth Rate Revised Up to 8% This Year... Highest in 11 Years"

Following the IMF, WTO Also Expects Rapid Economic Recovery... Raises Last October's Forecast by 0.8 Percentage Points

[Asia Economy Reporter Byunghee Park] The World Trade Organization (WTO) has forecasted that the global trade growth rate will reach 8% this year, the highest in 11 years. Following the International Monetary Fund (IMF)'s announcement that it will revise upward the global economic growth forecast at the upcoming Spring Meetings starting on the 5th, the WTO also expressed a more optimistic view on the global economic recovery than before.

According to Bloomberg News, on the 31st of last month (local time), the WTO announced it would raise its forecast for this year's global trade growth rate to 8%. This is an increase of 0.8 percentage points from the 7.2% forecast presented in October last year.

One day earlier, the IMF also stated that it would revise upward the global economic growth forecast in its world economic outlook report to be released next week, to a level higher than the 5.5% forecast presented in January.

The 8% trade growth rate is the highest since 2010, when it recorded 14%. In 2009, due to the global financial crisis, global trade volume plummeted by 12% compared to the previous year, then rebounded sharply the following year.

WTO Global Trade Growth Rate Trend [Image source= Bloomberg]

The same pattern is repeating amid the COVID-19 pandemic's impact on the global economy. Last year, global trade volume decreased by 5.3% due to COVID-19, and a significant rebound is expected this year.

The WTO stated that global trade last year fell by 5.3% compared to 2019. It also added that the decline in trade was not as large as initially expected. In fact, the WTO had forecasted in October last year that trade volume would decrease by 9.2% in 2020.

The WTO explained that the reason the impact of COVID-19 on global trade was less severe than expected was because vaccines were developed and distributed faster than anticipated. It judged that the biggest variable for global trade this year remains COVID-19. Ngozi Okonjo-Iweala, WTO Director-General, warned that if the pace of vaccine distribution slows down, the trade growth rate could be 2 percentage points lower. Conversely, she analyzed that the effect of various vaccines being developed and rapidly distributed could increase this year's global GDP by 1 percentage point and trade growth rate by 2.5 percentage points.

Therefore, Director-General Okonjo-Iweala emphasized that the whole world must cooperate to accelerate vaccine distribution. She stressed, "To recover quickly from the COVID-19 crisis, keeping markets open is essential," and added, "Fast and fair vaccine distribution is crucial for a strong and sustained recovery."

The WTO forecasted that global trade volume will increase by 4% in 2022. While the global gross domestic product (GDP) shrank by 3.8% last year, it is expected to grow by 5.1% this year and increase by 3.8% next year.

This content was produced with the assistance of AI translation services.