That’s according to the United Nations agency for trade and development, UNCTADwhich analysts say global growth “turns negative” in the second half of 2022.
The United Nations agency said trade in goods and services is expected to reach $25 trillion and $7 trillion, respectively, by the end of the year.
The recession begins in the third quarter of the yearwith commodity trading about one percent lower than from March to May.
UNCTAD calculations are based on national statistics.
Value drops
In its global trade update, UNCTAD said that although real services get a raise grew 1.3% in the third quarter, both goods and services are expected to decline in value in the run-up to year-end.
Demand for foreign goods “proves resilience” through 2022, the trade and development update said, with total trade volume increasing by three percent.
Trade volumes of East Asian economies showed resilience, while South-South trade lagged in the third quarter.
Overall, “Geopolitical conflicts, prolonged inflation and lower-than-expected global demand are expected to negatively affect global trade in 2023,” UNCTAD said in its highlight report.
negative factor
Among the negative factors presented, there is a lower economic growth forecast until 2023 due to high energy prices, rising interest rates, prolonged inflation in many economies and the severe impact of the war in Ukraine.
The prices of components and consumables are expected to reduce import demand and lead to a decrease in the volume of international trade.
Record global debt levels and rising interest rates,”raises significant concerns about the sustainability of debt”, increasing pressure on the most indebted governments and “amplifying vulnerabilities”.
positive factor
Above, adjusted ports and shipping companies to the supply chain crisis caused by COVID-19 UNCTAD said the pandemic, with new ships entering service and port congestion, has largely been resolved.
Recently signed trade agreements such as the Regional Comprehensive Economic Partnership in the Asia-Pacific (RCEP) and the African Continental Free Trade Area (AfCFTA), “will become a reality. real and provide some impetus” for the entire international system, the report notes.
Risks and uncertainty continue to be high for global supply chains as a whole, but efforts towards building a greener global economy are expected to drive demand for environmentally sustainable products, said UNCTAD, while reducing demand for high-carbon goods, and for fossil fuels.
