WTO slashes global trade growth on falling import demand, lower commodity prices
The World Trade Organisation (WTO) has cut its global trade growth forecast for 2015 from 3.3% to 2.8% amid falling import demand in China, Brazil and other emerging economies, falling oil and commodity prices and significant exchange rate fluctuations.
This will mark the fourth consecutive year that trade growth has dipped below 3% and tracks with world gross domestic product (GDP) growth rates as volatility in financial markets, uncertainty over the changing stance on monetary policy in the US and mixed recent economic data “clouded” the outlook for the world economy and trade in the second half of the year and beyond, WTO director-general Roberto Azevêdo says.
The WTO has also marginally reduced its growth estimates for 2016 to 3.9% from the previously expected 4% and below the 5% average achieved during the past two decades.
Exports from developed economies are expected to grow 3% this year and 3.9% next year, while developing economies’ exports will register slower growth at 2.4% this year and 3.8% in 2016.
Imports of developing countries will rise 2.5% this year and 5.2% next year, while import growth in developed economies will remain static at 3.1% this year and 3.2% in 2016.
“At the time of our last forecast in April 2015, world trade and output appeared to be strengthening based on available data in the fourth quarter of 2014. However, results for the first half of 2015 were below expectations as quarterly growth turned negative, averaging –0.7% in the first and second quarter,” Azevêdo notes.
The quarterly export growth of developed economies remained flat at –0.2% in the first two quarters of 2015, while developing economies recorded a drop in export growth to –1.9%, driven by weaker developing countries’ imports (–2.2%) and stagnation in developed countries’ imports (0.1%).
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