The World Trade Organization (WTO) on Tuesday (01.10.2019) cut its forecast for global trade growth this year by more than half and said new rounds of tariffs and retaliation, a slowing economy and a disorderly Brexit could reduce it further.
The WTO said it now expects world trade to expand by 1,2% this year, compared with the 2,6% estimate it made in April. This growth was up from 3,0% in 2018. Growth in 2020 is forecast at 2,7%, down from the previous estimate of 3,0%.
"The darkening outlook for trade is discouraging, but not unexpected”, WTO Director-General Roberto Azevedo said in a statement, urging the institution's members to resolve their trade disagreements and cooperate to reform the institution.
The Geneva-based body said the downgrade reflected estimates of slower global economic growth, partly due to trade tensions but also cyclical and structural factors, and, in Europe, Brexit-related uncertainty.
The WTO has given a forecast range for trade growth this year of between 0,5% and 1,6%, and 1,7% to 3,7% in 2020. The upper end of these estimates could be achieved if trade tensions ease.
“Outlook risks are heavily weighted to the downside and dominated by trade policy”, the WTO said.
The United States and China have been locked in a trade war for more than a year. Both have imposed punitive tariffs on hundreds of billions of dollars worth of goods on each other, impacting global markets and threatening global growth.
US President Donald Trump has also imposed tariffs on products from other countries, notably steel and aluminium, in an attempt to reduce the trade deficit of the world's largest economy. WTO figures imply that he has had limited success.
The WTO said on Tuesday that North America showed the fastest growth in exports of any region in the first half of the year, at 1,4%, although the increase in imports to North America was also higher than anywhere else, at 1,8%.
Source: Reuters
BREAKING: The WTO has lowered its trade growth forecasts for 2019 and 2020 amid escalating trade tensions. Full report: https://t.co/FyCctWGfiT #WTOForecast pic.twitter.com/knkh2UFcet
— WTO (@wto) October 1, 2019
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