In light of news about weakening demand for oil around the world, it turns out the movement of all kinds of merchandise between countries is slowing down. The World Trade Organization has cut its forecast for global trade growth this year in half. 

Back in April, the WTO predicted international trade would grow by 1.7% in 2023. Now it’s walking that back to more like 0.8% as stubborn inflation and other factors put pressure on economies. Experts said the WTO was betting that a couple of drags on global trade would let up. 

“I think they were very clearly expecting inflation to come down faster than it has,” said Jacob Kirkegaard with the Peterson Institute for International Economics. 

That didn’t go as planned. 

Rising interest rates meant to tame inflation put a dent in U.S. consumer spending, and even more of one in Asia and Europe. 

“There are some economies that are teetering on the edge of recession, countries like Germany, for instance,” said Eswar Prasad, a professor of trade policy at Cornell University. 

Plus, he said, the war in Ukraine isn’t letting up. 

“There is some doom and a fair bit of gloom in the air,” Prasad said.

Meanwhile, the world’s largest exporter is in the middle of a real estate crisis. 

“I mean, China is just massive,” said Christine McDaniel at the Mercatus Center at George Mason University. “So when they sneeze, the rest of the world can get a cold, right?”

She said the strained property market in China is hampering that country’s much anticipated pandemic recovery.

All that means fewer goods are moving between countries, which Jacob Kirkegaard with the Peterson Institute said is generally not a positive indicator. 

“Trade makes you richer, and it tends also to make you more productive,” he said.

But the WTO still has some optimism left. It stands by its forecast that global trade will rebound in 2024, with 3.3% growth.