Ngozi Okonjo-Iweala, the Director General of the World Commerce Organization (WTO), has issued a warning that the continuing Israeli-Hamas conflict will significantly affect international commerce flow if it spreads throughout the area and is not immediately contained.
The World Trade Organization Chief made this known during this week’s annual meeting of the International Monetary Fund (IMF) and World Bank. Okonjo-Iweala warns that the Israeli-Hamas conflict could exacerbate other issues that are already impeding global trade growth, such as higher interest rates, a tense Chinese real estate market, and Russia’s conflict in Ukraine.
The abrupt outbreak of hostilities between Israel and the Islamist Hamas organization that rules over the Gaza Strip will further constrain trade development, according to the WTO DG.
She said, “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. Everybody’s on eggshells and hoping for the best.
There is uncertainty about whether this is going to spread further to the whole region, which could impact very much on global economic growth. We hope it will end because it does create this uncertainty. It’s another dark cloud on the horizon.”
The Geneva-based World Trade Organization (WTO) last week cut in half its projection for growth in world trade in goods this year, citing ongoing inflation, increased interest rates, the weakening Chinese economy, and the conflict in Ukraine.
The organization predicted that 2023’s merchandise trade volumes would rise by just 0.8%, as opposed to its 1.7% April prediction.
It predicted that the growth of the goods trade in 2024 would be 3.3%, which is essentially 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 linked to global tensions, there was no proof of a more widespread de-globalization that may jeopardize its 2024 prediction.