WTO: Global trade outlook 2024

The World Trade Organization (WTO) has recently released its latest trade outlook report, shedding light on the impact of conflicts, rising interest rates, and slowing demand on global trade. Senior Economist at the WTO, Coleman Nee, discussed the key findings of the report in an exclusive interview with CNBC Africa. The report forecasts a gradual recovery in world merchandise trade, with a predicted growth rate of 2.7 percent in 2024 and 3.0 percent in 2025, slightly higher and lower than initial estimates, respectively. While the headline figures show minimal changes, there are notable regional variations that could impact global trade dynamics. Europe is experiencing weaker imports and trade, while Asia is witnessing stronger export growth. This divergence in regional performance could have implications for Africa, as Europe is a major trading partner. With Asian growth remaining steady, African exports to the region may see moderate growth. However, Africa's export volume growth is forecasted at 2.5 percent in 2024, with import volume growth at only one percent, primarily driven by moderate demand for natural resources. Amidst currency fluctuations and stable dollar rates, Africa's exports could benefit from stronger economic growth in North America and Europe, potentially boosting export volumes. The report also highlights downside risks, such as escalating conflict in the Middle East and changing macroeconomic policy stances, which could impact global trade flows. While conflicts in the Middle East have caused disruptions in shipping routes, leading to increased costs but minimal impact on overall trade, prolonged conflicts and energy price fluctuations could hinder industrialized regions' import demand from Africa. Additionally, the report discusses the trend of increasing fragmentation in international trade due to geopolitical considerations, but notes a lack of significant regionalization. However, there is potential for increased regional trade, particularly in Africa, where intra-regional trade is on the rise. The report suggests that enhancing intra-Africa trade could help mitigate external economic shocks and stimulate economic growth for the continent. Currently, intra-Africa trade has increased to around 12% of total African trade, showcasing a growing trend that could bolster Africa's resilience to global trade uncertainties.