The pace of trade will likely remain sluggish in 2023 as volumes are weighed down by inflationary pressures and the war in Ukraine, according to the World Trade Organization.

Global trade volume in 2022 came in below estimates at 2.7% growth, well below 2021’s figure of 9.4%. Growth in trade fell from an average of 4.2% in the first three quarters of 2022 before falling to 2.4% in the fourth quarter, according to the WTO’s latest outlook report.

The value of merchandise traded, however, rose by 12% to $25.3 trillion, driven by higher commodity prices. 

Contributing to the volume slump were high energy and grain prices in multiple regions, caused in part by the war in Ukraine and sanctions against Russia, in addition to the impact of COVID-19 in China and higher interest rates from central banks trying to tame inflation.

Still, 2022’s number came in above a worst-case scenario of a 0.5% growth rate, calculated at the outbreak of the war in Ukraine. The WTO noted in the report that trade was “more resilient than expected” for most of 2022 despite global disruption. 

For 2023, WTO economists project growth in trade volume of 1.7%, which the report called “subpar.” While 2023’s projections would fall below last year’s figure, it would still be an increase from the October estimate of 1%. The WTO forecasts growth will accelerate to 3.2% in 2024. 

But the report cautioned that several unknowns could complicate trade going forward.

“[T]his estimate is more uncertain than usual due to the presence of substantial downside risks, including rising geopolitical tensions, global food insecurity, the possibility of unforeseen fallouts from monetary tightening, risks to financial stability and increasing levels of debt,” the WTO said in the report.