Gaza and Ukraine Wars Impact Global Trade Growth
The ongoing conflicts in Gaza and Ukraine are significantly threatening global trade, according to a recent report by the World Trade Organization (WTO). The organization has revised its global trade growth forecast for 2025 down from 3.3% to 3%, citing the escalation of violence in the Middle East and the persistent Russian-Ukrainian war as primary factors.
Despite these challenges, the WTO anticipates a modest recovery in global trade for 2024, projecting a growth of 2.7% for the current year, a slight increase from its earlier estimate of 2.6%. WTO Director-General Ngozi Okonjo-Iweala expressed concerns about the potential for further escalation in regional conflicts, which could severely disrupt trade routes and energy costs, affecting countries far beyond the immediate conflict zones.
The escalation of Israeli military actions against Hezbollah in Lebanon has raised alarms about a broader regional war, following a year marked by intense conflict in Gaza. This situation is compounded by diverging monetary policies between major economies, particularly the U.S. and China, which could lead to financial instability and affect capital flows, especially for poorer nations.
Interestingly, the report also notes a shift in trade patterns, with goods that once traveled directly between the U.S. and China now passing through intermediary countries like Vietnam and Mexico. This change illustrates the evolving landscape of global trade amidst geopolitical tensions and economic uncertainties.
