World trade growth set to slow to 1.9% this year
Growth in world trade in goods will slow down markedly to 1.9% this year from 4.6% in 2025 and could decelerate even more if the Middle East war continues to push energy prices higher and disrupt global transport, a World Trade Organization report said.
If crude oil and liquefied natural gas prices remain high throughout 2026 due to the conflict, global trade in goods could slow further to 1.4%, WTO economists said. Asian and European fuel-reliant importers hit hardest.
Services trade also faces a 0.7-point drop from growth forecasts of 4.8% to 4.1% due to shipping and flights disruption, the report found.
Besides the disruption to oil and gas markets, supplies of fertilisers, sulphur, helium, aluminium, polyethylene and other critical raw materials have been hit by Iran’s chokehold on the Strait of Hormuz. Shipping costs have surged on the back of higher fuel prices as well.
A prolonged blockade of the Strait of Hormuz by Iran, choking one-third of fertilizer urea imports, risks hitting major producers like India, Thailand, Brazil, fuelling food security risks, the WTO report said.
Source: reuters.com