Dhe negative news from the global economy has not stopped recently: car companies have to shut down production because microchips are missing, petrol stations are running out of gas in Great Britain and the power supply is shaking in India and China because the coal reserves are almost being used up. In this tense situation, the World Trade Organization (WTO) surprised on Monday with an optimistic forecast for world trade.
The organization expects global trade in goods to grow by 10.8 percent this year and another 4.7 percent in the coming year. Half a year ago, when the supply chain problem was significantly less, the WTO had expected 8 percent growth for 2021 and 4 percent for 2022. “That is good news,” said WTO Director General Ngozi Okonjo ‑ Iweala in Geneva. Should the forecast come true, the losses from the crisis year 2020, when the trading volume shrank by 5.3 percent, would be more than made up for.
The economists of the trade organization justified their positive expectations with the strong global economy, which goes hand in hand with a high demand for goods. In particular, the countries in which vaccinations are well advanced and in which the governments have intervened with large economic stimulus programs are driving the dynamism: The prices for shipping containers are at record levels, energy resources are in demand as seldom before, and companies are again hiring many new employees.
Germany is dependent on world trade
The experts, on the other hand, did not weight the delivery problems in the “stressed” supply chain that are now visible in many countries so heavily. These are more of a temporary nature and are also due to singular events such as factory fires and extreme weather.
A study by KfW published this Tuesday shows how dependent Germany in particular is on flourishing world trade. 28 percent of domestic jobs and 31 percent of German value added depend directly or indirectly on exports, the development bank has determined together with the Prognos institute. Large industrial sectors (automobiles, machines, pharmaceuticals) generate far more than half of their sales abroad.
Despite the good forecast by the WTO, the question remains of how world trade will continue in the medium term in view of the corona pandemic and the upheavals in the supply chains. “There are some indications that the globalization of the corona crisis is advancing at a slow pace,” says Fritzi-Köhler-Geib, KfW’s chief economist.
In this “middle scenario”, the German gross domestic product will grow by 1.1 percent annually between 2023 and 2030. Politicians, through intensive international cooperation, and the economy, through innovative products, especially in the area of climate protection, are equally challenged so that these figures can be achieved.
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