WTO warns of ‘real’ recession risks in some major economies

NUSA DUA, INDONESIA – The Director-General of the World Trade Organization (WTO) warned Wednesday that several major economies face a real risk of slipping into recession.

WTO Director-General Ngozi Okonjo-Iweala told Reuters as a bystander at the G20 summit in Bali, Indonesia: “It may not happen everywhere, but some major economies are going into recession. I am afraid,” he said.

Of course, the impact could be enormous for emerging market and poorer countries that need external demand from advanced economies to recover. “

The Geneva-based trade body last month predicted that global trade would grow by just 1.0% in 2023, down from an estimated 3.5% increase this year.

“There are so many uncertainties and most of the risks are downside,” she said.

A second day of meetings by Group 20 (G20) leaders on Wednesday was interrupted by an emergency meeting to discuss reports of a missile landing on Polish territory, adding to uncertainty over the economic fallout from the war in Ukraine. I was.

Okonjo Iweala said he called on G20 leaders to phase out food export restrictions. Food export restrictions are on the rise, hurting poorer countries by pushing up food prices.

One of the few bright spots she pointed out was the meeting between US President Joe Biden and Chinese President Xi Jinping.

“I don’t want to read too much into it, but it’s always good for the world’s two largest economies to talk to each other,” Okonjo Iweala said of the US-China summit.

“Certainly in terms of trade, it’s very helpful.”

Okonjo-Iweala said he was “very hopeful” that some breakthroughs would be made in reforming the WTO’s dispute settlement system in a trade dispute.

“The US is actively consulting with other member states at an informal level,” she said, adding that stronger US engagement would help accelerate progress on reforms from early next year.

At a September meeting, trade ministers from the G7 developed countries agreed to work towards a functioning WTO dispute settlement system by 2024.