The world is heading towards a global recession due to a collision of “poly-crises” around security, climate, energy, food prices, the head of the World Trade Organization (WTO) said yesterday (27 September).
Director general Dr Ngozi Okonjo-Iweala told the annual WTO Public Forum in Geneva that the world “cannot afford to do business as usual”.
While global trade was recovering from the Covid-19 pandemic, trade data is now showing signs that the world is facing a recession, she told CNN journalist Richard Quest in an interview opening the event.
Look to recovery
“Global growth forecasts have been downgraded by the World Bank and the IMF. We are edging towards a global recession. We have to think of the recovery and restoring growth,” she said.
Central banks have “not much choice just now” but to raise interest rates, but Dr Okonjo-Iweala admitted that this would hit the developing world hardest, compounding its experience of being “at the back of the queue” when it came to vaccines.
Export restrictions delayed getting vaccines to the developing world, she admitted, and added: “This wasn’t global solidarity at its best.”
The Straits Times reports that Okonjo-Iweala said her top concern was ensuring global food security, followed by access to energy.
“The spectre of not having enough food is one that worries me,” she said.
The former finance minister of Nigeria pointed to WTO agreements on food prices “to keep export restrictions as low as possible so there is free flow of food, fertilisers and agricultural products” and said action had allowed the World Food Programme to purchase food without restrictions.
Earlier, she told Reuters that she expects global trade forecasts will be revised lower from the current 3% for 2022, due to the ongoing Ukraine war and related food and energy crises.
“We are in the middle of revising our forecasts now but it’s not looking very promising. All the indicators are pointing to downside numbers,” Okonjo-Iweala said, without giving exact estimates.
The WTO lowered its forecast for global trade growth this year to 3%, down from 4.7% in April. It predicted 3.4% growth in 2023.
The Public Forum is the WTO's largest annual outreach event, providing a platform for “policy makers, leading global business people, students, academics and non-governmental organizations to come together and debate on a wide range of WTO issues”.
Among the issues being discussed this year is the gender inequality in international trade – something Okonjo-Iweala will be addressing on a panel tomorrow, alongside IOE&IT director general Marco Forgione and Pamela Coke-Hamilton, the executive director of the International Trade Centre.
You watch the livestream of the event from 10.30am CET tomorrow (9.30am BST) here.