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WTO: War in Ukraine to curb trade, economic growth this year

GENEVA (AP) — The World Trade Organization predicted Tuesday that trade in goods will grow much less than previously expected this year, saying prospects for the global economy have darkened since the onset of Russia’s war in Ukraine.

In the latest grim economic outlook to emerge, the Geneva-based trade body pointed to multiple uncertainties in its forecast over the next two years because Russian and Ukrainian exports of items like food, oil and fertilizers are under threat from the war. It also cited the lingering impact of the COVID-19 pandemic — notably from lockdowns in China.

“It’s now clear that the double whammy of the pandemic and the war has disrupted supply chains, increased inflationary pressures and lowered expectations for output and trade growth,” WTO Director-General Ngozi Okonjo-Iweala told reporters.

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The WTO said its projections for world trade take into account factors like the impact of the war, sanctions on Russia and shrinking worldwide demand amid lower business and consumer confidence.

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It said world merchandise trade volume is expected to grow 3% this year, down from a forecast of 4.7% before the war began. For 2023, it’s expected to increase 3.4%.

The trade body also projects that global gross domestic product at market exchange rates will grow by 2.8% this year, down from the 4.1% previously anticipated.

Okonjo-Iweala said the war has caused “immense human suffering” in Ukraine and its effect has rippled around the world, notably in poorer countries, adding: “A potential food crisis is looming.”

She said high fuel prices and expensive fertilizer pose a threat to future crop yields, and the war has further strained global supply chains already under pressure.

The WTO is part of a steering committee set up by U.N. Secretary-General Antonio Guterres to look into the possible food crisis. The panel has discussed, among other things, whether countries with “additional buffer stocks” of grain could release some supply into international markets, Okonjo-Iweala said.

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She expressed hopes for a “humanitarian cover” to ensure that the harvest of 80% of Ukraine’s winter wheat in July can go forward, and that wheat can be planted in the country in September.

The WTO outlook follows a similarly downbeat forecast from the World Bank.

The Washington-based lender said in a report Sunday that the war in Ukraine is set to inflict twice the amount of economic damage across Europe and Central Asia that the COVID-19 pandemic did.

It also said Ukraine’s economy will shrink by 45.1% this year. Besides Ukraine, the report focused on central and Eastern Europe, former Soviet republics, the Balkan countries and Turkey.

Pakistan’s parliament on Monday elected opposition lawmaker Shahbaz Sharif as the new prime minister, following a week of political turmoil that led to the weekend ouster of Premier Imran Khan.

Sharif took the oath of office inside the stately, white marble palace known as the Presidency in a brief ceremony.

But his elevation won’t guarantee a peaceful path forward or solve the country’s many economic problems, including high inflation and a soaring energy crisis.

Sharif, the brother of disgraced former Prime Minister Nawaz Sharif, won with 174 votes after more than 100 lawmakers from Khan’s Pakistan Tehreek-e-Insaf, or Pakistan Justice Party, resigned and walked out of the National Assembly in protest.

Those 174 votes — two more than the required simple majority — are enough to pass laws in the 342-seat assembly. If Khan’s followers take to the streets, as he has vowed, it could create more pressure on lawmakers and deepen the crisis.

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Khan, a former cricket star whose conservative Islamist ideology and dogged independence characterized his three years and eight months in office, was ousted early Sunday. He lost a no-confidence vote after being deserted by his party allies and a key coalition partner.

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In a show of strength and a precursor to the political uncertainty ahead, Khan rallied hundreds of thousands of supporters in protests Sunday night, describing the new leadership as an “imposed government” that colluded with the U.S. to oust him. His backers marched in cities across Pakistan, waving large party flags and shouted slogans promising to return him to power. The crowds were dominated by youths who make up the backbone of Khan’s supporters.

The political drama began April 3 when Khan sidestepped an initial no-confidence vote demanded by the opposition by dissolving parliament and calling early elections. The opposition, which accuses Khan of economic mismanagement, appealed to the Supreme Court. After four days of deliberations, the court said Khan’s move was illegal and the no-confidence vote went ahead, leading to his ouster.

Khan has demanded early elections — the balloting is not due before August 2023. He has tapped into anti-American sentiment in Pakistan, accusing Washington of conspiring with his opponents to topple him. That conspiracy theory resonates with his youthful base, which often sees the U.S. war on terrorism after 9/11 as unfairly targeting Pakistan.

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Khan claims Washington opposes him because of his independent foreign policy favoring China and Russia. He was criticized for a visit he made on Feb. 24 to Moscow, where he met with President Vladimir Putin as Russian tanks rolled into Ukraine.

The U.S. State Department has denied any involvement in Pakistan’s internal politics.

China, which is Pakistan’s key ally and investor, said Monday it would support any government.

“As Pakistan’s close neighbor and iron-clad friend, we sincerely hope that all factions in Pakistan will remain united and work together for national stability and development,” Foreign Ministry spokesperson Zhao Lijian said at a briefing. “I would like to emphasize that no matter how the political situation changes in Pakistan, China will unswervingly adhere to its friendly policy toward Pakistan.”

China is heavily invested in Pakistan in its multibillion-dollar global initiative to link south and central Asia to Beijing.

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