Liputan6.com, Jakarta – The World Trade Organization (WTO) has halved its forecast for global trade growth this year.

The reductions come as rising interest rates have weakened the purchasing power of consumers in the United States, Europe and Asia.

Quote US NewsThe 164-member global trade body on Friday (10/06/2023) lowered its April forecast, which predicted global merchandise trade growth of 1.7 percent in 2023, and said the figure would be lowered to 0.8 percent.

WTO Director-General Ngozi Okonjo-Iweala said the expected slowdown in trade was worrying because it could put pressure on the living standards of people around the world, particularly in poor countries.

“Global economic fragmentation will only exacerbate these challenges,” he said.

The WTO highlighted that rising inflation in various countries, including major economies, has led to higher than expected interest rates in most trading countries, coupled with challenges related to the sector crisis. Chinese real estate and the war in Ukraine.

The Geneva-headquartered WTO said the slowdown in trade occurred in various types of goods, including iron and steel, office and telecommunications equipment, textiles and clothing.

Automobiles are the exception, with sales rising sharply this year to offset chronic shortages that have limited deliveries during the pandemic.

The WTO estimates also do not include the services sector, but the IFU agency said growth was moderate after international tourism saw a sharp increase in 2022.

But global trade in commercial services grew by only 9% in the first quarter of 2023, compared to 19% in the second quarter of 2022.