GENEVA, Switzerland: The war against Iran and growing tensions in West Asia is threatening growth in global trade, the World Trade Organisation (WTO) said on Thursday, reported German Press Agency (dpa).
If the conflict drags on, energy prices will remain high and transport costs will rise, likely cutting growth by 0.5 percentage points this year, the WTO reported.
“Prospects could still improve if the conflict ends quickly and the boom in AI spending continues,” the WTO wrote in its semi-annual trade outlook.
In an optimistic scenario without energy price shocks, the WTO sees goods trade growing by 1.9 per cent this year.
The last time conditions were this weak was in 2023, when global trade fell by just over 1 per cent following Russia’s full-scale invasion of Ukraine.
However, if oil and gas prices remain high throughout the year, this will reduce growth by 0.5 percentage points, the WTO predicted.
For 2027, the WTO believes growth of 2.6 per cent is possible without energy price shocks.
The view for 2025 was unexpectedly positive, the WTO said, despite the highest US tariffs since World War II.
The WTO put growth in global trade in goods for 2025 at 4.6 per cent. In October it had expected only 2.4 per cent.
The McKinsey Global Institute expects growth of more than 6 per cent, with both it and the WTO citing the boom in products using artificial intelligence (AI) as a key factor.
The WTO also pointed to companies bringing forward orders in anticipation of tariff changes. – BERNAMA-dpa
