Middle East war could threaten global food security – WTO
The Middle East war could weigh heavily on already slowing global trade, potentially threatening global food security, the World Trade Organisation warned Thursday. If energy prices remain high, the WTO forecasts that merchandise trade volumes could grow just 1.4 per cent this year, compared to 4.6 per cent in 2025. The WTO’s annual global trade […]
Middle-east crisis
The Middle East war could weigh heavily on already slowing global trade, potentially threatening global food security, the World Trade Organisation warned Thursday.
If energy prices remain high, the WTO forecasts that merchandise trade volumes could grow just 1.4 per cent this year, compared to 4.6 per cent in 2025.
The WTO’s annual global trade outlook was released nearly three weeks into an escalating war in the Middle East that is already causing soaring energy prices and reviving fears that a major economic crisis is looming.
“Sustained increases in energy prices could increase risks for global trade, with potential spillovers for food security and cost pressures on consumers and businesses,” warned WTO chief Ngozi Okonjo-Iweala.
She told reporters in Geneva that, among other things, the war “threatens global food security”, appealing for supply chains to remain open.
Since US-Israeli forces launched the war against Iran on February 28, Tehran has responded with attacks throughout the Middle East and threats that have nearly halted shipping in the Strait of Hormuz, through which one-fifth of global oil supplies normally pass.
And the conflict appears to be escalating, with massive attacks targeting oil and gas production, storage and transportation infrastructure across the region.
Since the start of the war, WTO economists have been working to revise their annual forecasts.
Given the high degree of uncertainty around the impact of the war and its duration, the organisation on Thursday presented two possible scenarios for how global trade will evolve this year.
In the first scenario, which excludes possible energy price shocks, growth in global merchandise trade volumes is expected to slow this year to 1.9 per cent from 4.6 per cent last year.
That scenario assumes a slight dip in global gross domestic product (GDP) growth, from 2.9 per cent in 2025 to 2.8 per cent this year and in 2027.
According to the WTO, that scenario would see merchandise trade “normalise” this year, regardless of the war in the Middle East, after stronger-than-expected growth in 2025 driven especially by a surge in artificial intelligence-related products.
Trade last year was also boosted by among other things “the front-loading of imports in North America ahead of the expected imposition of ‘reciprocal’ tariffs by the United States”, the WTO said in its report.