World Trade Organization chief Ngozi Okonjo-Iweala said she hoped the Israel-Hamas conflict could be ended quickly, warning it would have a “really big impact” on already weak global trade flows if it widened throughout the region.
Okonjo-Iweala, in Morocco for this week’s annual meetings of the International Monetary Fund and World Bank, said Middle East violence could add to factors throttling trade growth, including higher interest rates, a strained Chinese property market and Russia’s war in Ukraine.
“We hope this ends soon and it’s contained. Our biggest fear is if it widens, because that will then have a really big impact on trade,” she said in an interview. “Everybody’s on eggshells and hoping for the best.”
Okonjo-Iweala said global uncertainty was already limiting growth in trade, but that would be exacerbated by the sudden onset of war between Israel and the Islamist Hamas group that controls the Gaza Strip
“There is uncertainty about whether this is going to spread further to the whole region, which could impact very much on global economic growth,” she said. “We hope it will end because it does create this uncertainty. It’s another dark cloud on the horizon.”
The Geneva-based trade body last week halved its growth forecast for global goods trade this year, citing persistent inflation, higher interest rates, the slowing Chinese economy and the war in Ukraine.
The WTO said merchandise trade volumes would increase by just 0.8% in 2023, compared with its April estimate of 1.7%.
For 2024, it said goods trade growth would be 3.3%, a forecast virtually unchanged from its April estimate of 3.2%.
The 164-member organization repeated its warning that it saw some signs of trade fragmentation linked to global tensions, but no evidence of a broader de-globalization that could threaten its 2024 forecast.