NUSA DUA, Indonesia – The head of the World Trade Organization (WTO) warned on Wednesday that several major economies are at real risk of sliding into recession as the war in Ukraine, rising food and fuel prices and soaring inflation is clouding the global outlook.
“It may not happen everywhere, but several key countries are at risk of sliding into recession,” WTO Director-General Ngozi Okonjo-Iweala told Reuters on the sidelines of the G20 leaders’ meeting in London. Bali, Indonesia.
“Of course, the impact of this can be quite significant for emerging markets and poor countries, which need external demand from developed countries to recover.”
Last month, the Geneva-based trade body predicted global trade would grow just 1% in 2023, down sharply from an estimated 3.5% increase for this year.
“There are so many uncertainties and most of the risks are on the downside,” like the fallout from the war in Ukraine and headwinds from inflation, she said.
A second day of talks by Group of 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 of the war in Ukraine.
Okonjo-Iweala said she called on G20 leaders to phase out food export restrictions, which have proliferated and hurt poor countries by driving up food prices.
Among the few bright spots she noted, US President Joe Biden and Chinese leader Xi Jinping met on the sidelines of the G20 summit to mend strained bilateral relations that are part of the uncertainties hanging over the outlook for global recovery. .
“We don’t want to read too much into it, but it’s always good when the world’s two largest economies talk to each other,” Okonjo-Iweala said of the US-China summit.
“Certainly as far as trade is concerned, it’s very helpful.”
Okonjo-Iweala said she was “very hopeful” of a breakthrough in reforming the WTO’s dispute settlement system, which has been crippled since 2019 when the administration of former US President Donald Trump has blocked the nomination of judges for an appellate body arbitrating in the global market. trade disputes.
“Americans are actively consulting with other members at an informal level,” she said, adding that increased US engagement will help accelerate reform progress from early next year.
At a meeting in September, trade ministers from the G7 advanced economies agreed to work towards having a functioning WTO dispute settlement system in place by 2024.
Subscribe to INQUIRER PLUS to access The Philippine Daily Inquirer and over 70 titles, share up to 5 gadgets, listen to the news, download as early as 4am and share articles on social media. Call 896 6000.