The World Trade Organization’s chief Ngozi Okonjo-Iweala on Wednesday said she was “less optimistic” about global trade in 2024, citing concerns related to tensions in the Red Sea.
She mentioned that the combination of weaker global economic growth, “worsening geopolitical tensions, the new disruptions we see in the Red Sea, on the Suez Canal, the Panama Canal” meant “we are less optimistic”.
Ngozi Okonjo-Iweala conveyed these concerns while addressing journalists at the World Economic Forum in Davos, where political and economic leaders convene to discuss global challenges.
Prior to the significant Hamas attack on Israel in October and the ensuing conflict in Gaza, the WTO had initially forecasted a 0.8% growth in trade for 2023 and projected a 3.3% growth for this year. However, Okonjo-Iweala cautioned that future forecasts for 2024 would reflect a lower figure.
“We think there are a lot of downside risks to the forecasts we had made last year of 3.3 percent of growth of merchandise volumes this year. So we expect weaker performance,” she said.
“We will be revising estimates for this year, but they won’t be ready for another month or so,” Okonjo-Iweala added.
A series of attacks by Yemeni rebels on shipping routes in the Red Sea has disrupted this crucial trade pathway. Simultaneously, the severe drought affecting the Panama Canal has led authorities to slow down transits.
The Huthi rebels in Yemen claim their attacks are in solidarity with Palestinians in Gaza.
Consequently, these disruptions have prompted shipping companies to avoid the Suez Canal.
The Hamas attack on October 7 resulted in approximately 1,140 casualties in Israel, primarily civilians, according to an AFP tally based on official Israeli figures. In response, over 24,400 Palestinians, predominantly women, young children, and adolescents, have been killed in the Gaza Strip in Israeli bombardments and ground offensives since October 7, as reported by the Hamas government’s Ministry of Health.