World Trade Organization (WTO) economists have downgraded their forecasts for trade growth in 2019 and 2020 given escalating trade tensions and a slowing global economy, according to an Oct. 1 WTO press release.
Export and import growth slowed across all regions and at all levels of development in the first half of 2019, WTO said. World merchandise trade volumes now are expected to increase by only 1.2 percent in 2019, substantially slower than the 2.6 percent growth forecast in April. The projected increase in 2020 now is 2.7 percent, down from 3 percent previously. The economists said the 2020 projection depends upon a return to more normal trade relations.
According to WTO, trade conflicts “pose the biggest downside risk” to the forecast but macroeconomic shocks and financial volatility also are potential triggers for a steeper downturn.
“The darkening outlook for trade is discouraging but not unexpected. Beyond their direct effects, trade conflicts heighten uncertainty, which is leading some businesses to delay the productivity-enhancing investments that are essential to raising living standards,” said WTO Director-General Roberto Azevêdo.
“Resolving trade disagreements would allow WTO members to avoid such costs,” he added. “The multilateral trading system remains the most important global forum for settling differences and providing solutions for the challenges of the 21st century global economy. Members should work together in a spirit of cooperation to reform the WTO and make it even stronger and more effective.”