Syllabus: GS3/ Economy
Context
- According to the World Trade Organization’s (WTO), Global Trade Outlook and Statistics, Global goods trade is expected to pick up in 2024 following a contraction in 2023.
Key Findings
Regional Trade Outlook
- World merchandise trade volume is expected to increase by 2.6% in 2024 and 3.3% in 2025 after a decline of 1.2 per cent in 2023.
- World real GDP growth at market exchange rates slowed from 3.1% in 2022 to 2.7% in 2023 but is expected to remain stable over the next two years at 2.6% in 2024 and 2.7% in 2025.
- The US dollar value of world merchandise trade fell 5% in 2023 to US$ 24.01 trillion but this decline was mostly offset by a strong increase in commercial services trade, which rose 9% to US$ 7.54 trillion.
- Trade in services: World commercial services trade grew 9% in 2023 despite a decline in freight transport.
- Africa’s exports will grow faster than those of any other region in 2024, up 5.3%.
- North America (3.6%), the Middle East (3.5%) and Asia (3.4%) should all see moderate export growth. European exports are expected to lag behind those of other regions, with growth of just 1.7%.
- Merchandise exports of least-developed countries (LDCs) are forecasted to grow 2.7% in 2024, down from 4.1% in 2023, before growth accelerates to 4.2% in 2025.
- Imports by LDCs should grow 6.0 percent this year and 6.8 percent next year following a 3.5% contraction in 2023.
Downside Risks
- Red Sea crisis: Attacks on commercial ships in the Red Sea and the Gulf of Aden have caused the average number of weekly passages to plunge more than 45% (264 in 2024, compared to 489 a year earlier).
- The monthly volume of shipments through the Suez Canal in metric tons has fallen 54%.
- Energy Prices: Red sea crisis raised concerns about a potential temporary oil shortage in certain regions potentially contributing to additional inflationary pressures.
| World Trade Organization (WTO) WTO is the international organization that deals with the rules of trade between countries. History: WTO was founded in 1995. It is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War. Headquarters: Geneva, Switzerland Member: The WTO is run by its 164 members. Mandate: Its aim is to promote free trade, which is done through trade agreements that are discussed and signed by the member states. The WTO also provides a forum for countries to negotiate trade rules and settle economic disputes between them. WTO’s Ministerial Conference The Ministerial Conference is the WTO’s top decision-making body. It usually meets every two years. All members of the WTO are involved in the Ministerial Conference and they can take decisions on all matters covered under any multilateral trade agreements. |
Source: WTO
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