The World Trade Organization has sharply cut its outlook for global trade this year following Russia’s invasion of Ukraine, warning the world "must brace for the fallout."
"The organization now expects merchandise trade volume growth of 3.0% in 2022 -- down from its previous forecast of 4.7% -- and 3.4% 2023, but these estimates are less certain than usual due to the fluid nature of the conflict," WTO said in a press release.
WTO added that, given current GDP assumptions, "merchandise trade volume growth in 2022 could be as low as 0.5% or as high as 5.5%."
WTO said that the biggest impact of the crisis has been a sharp rise in commodity prices as Russia and Ukraine are both key suppliers of essential goods, including food, energy, and fertilizers -- "supplies of which are now threatened by the war."
"The war in Ukraine has created immense human suffering, but it has also damaged the global economy at a critical juncture. Its impact will be felt around the world, particularly in low-income countries, where food accounts for a large fraction of household spending," director-general Ngozi Okonjo-Iweala said in the press release.
"Smaller supplies and higher prices for food mean that the world's poor could be forced to do without. This must not be allowed to happen," she added.
Speaking during a press conference, Okonjo-Iweala warned that there is a potential food crisis looming, and 35 African countries that import food from either Ukraine or Russia or both are seriously impacted -- citing Egypt and Tunisia in particular.
"This is why we need to act and act decisively on this issue of food in order to avoid food riots," the WTO director-general said.
Okonjo-Iweala also expressed her concerns about harvest and planting season in Ukraine for this and next year. "We hope there will be some sort of humanitarian cover so farmers can plant," she said.