Ngozi Okonjo-Iweala, the head of the World Trade Organization, expressed her optimism for a speedy resolution to the Israel-Hamas conflict and cautioned that if it spread throughout the region, it would have a “really big impact” on already fragile global trade flows.
While attending this week’s annual meetings of the International Monetary Fund and the World Bank in Morocco, Okonjo-Iweala warned that the violence in the Middle East might exacerbate other issues that are already impeding trade development, such as increased interest rates, a tense Chinese real estate market, and Russia’s conflict in Ukraine.
“We hope this is resolved quickly and is confined. In an interview, she stated, “Our main concern is if it spreads because it will have a huge impact on trade. “Everybody’s on eggshells and hoping for the best.”
The abrupt start of the conflict between Israel and the Islamist Hamas party that rules the Gaza Strip, according to Okonjo-Iweala, would worsen the already limited increase in commerce worldwide.
“There is uncertainty about whether this will spread further to the whole region, which could greatly impact global economic growth,” she stated. “We are hoping that it will end since this uncertainty exists. Another ominous cloud is approaching.
The Geneva-based trade organization this week cut in half its projection for growth in the world’s goods trade this year, citing ongoing inflation, higher interest rates, China’s weakening economy, and the conflict in Ukraine.
Compared to its projection from April of 1.7%, the WTO predicted that goods trade would only rise by 0.8% in 2023. It predicted that the goods trade growth in 2024 would be 3.3%, which is about the same as its 3.2% projection from April.
The 164-member body reiterated its caution, saying that while there were some indications of trade fragmentation connected to global tensions, there was no proof of a more widespread de-globalization that may jeopardize its 2024 prediction.
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