WTO chief Okonjo-Iweala ‘less optimistic’ for world trade due to Red Sea strikes

The World Trade Organization’s chief Ngozi Okonjo-Iweala on Wednesday said she was “less optimistic” about world trade in 2024, pointing to tensions in the Red Sea.

The head of the international trade body said 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.”

She was speaking to journalists at the World Economic Forum in the Swiss resort of Davos where political and economic elites are meeting to discuss global challenges.

Before the Hamas attack on Israel in October and the subsequent outbreak of war in Gaza, the WTO had predicted trade would grow by 0.8 percent in 2023 and projected growth of 3.3 percent this year.

But Okonjo-Iweala warned the figure for 2024 would now be lower in future forecasts.

“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 spate of attacks by Yemeni rebels on Red Sea shipping has disrupted the vital trade route while the worst drought in decades to hit the Panama Canal has forced authorities to slow transits.

Yemen’s Houthi rebels say their strikes are in solidarity with Palestinians in Gaza.

The attacks have, however, also caused shipping companies to avoid the Suez Canal.

The Hamas attack on October 7 resulted in the death of around 1,140 people in Israel, most of them civilians, according to an AFP tally based on official Israeli figures.

More than 24,400 Palestinians, around 70 percent of them women, young children and adolescents, have been killed in the Gaza Strip in Israeli bombardments and ground offensive since October 7, according to the Hamas government’s Ministry of Health.