The World Trade Organization, on Thursday, raised its forecast for the volume of global trade this year, and said that growth is likely to increase to three percent in 2025, assuming the conflict in the Middle East is contained.

The organization’s report stated that global trade recovered this year from a decline in 2023 caused by high inflation and increased interest rates.

In April, the organization expected a 2.6 percent increase in trade volume, and it revised it upward today to 2.7 percent.

Ngozi Okonjo-Iweala, Director-General of the Organization, said in a statement, “We expect a gradual recovery in global trade in 2024, but we remain wary of potential setbacks, specifically the possibility of escalating regional conflicts such as those in the Middle East.”

She added: “The impact may be most severe on the participating countries directly, but it may also indirectly affect global energy costs and shipping lanes.”

Israel's escalating attack on the Lebanese Hezbollah group in the past few weeks has fueled fears of an unstoppable slide into a Middle East-wide war.

Israel's attack comes a year after the outbreak of war in the Gaza Strip.

The World Trade Organization also pointed to divergent monetary policies among major economies as another risk factor to the outlook.

The report stated that this “could lead to financial volatility and shifts in capital flows as central banks cut interest rates,” adding that this would make it more difficult for poorer countries to service debt.

The organization said: “There is also the possibility of a somewhat limited upside in expectations if interest rate cuts in advanced economies stimulate stronger-than-expected growth without reviving inflation.”