The World Trade Organization (WTO) on September 21 revised its forecast for global trade growth this year to 3.6 percent from the previous estimate of 2.4 percent, citing a sharp acceleration in global trade growth in the first half of the year.
According to WTO economists, stronger growth this year is attributed to a resurgence of Asian trade flows, as intra-regional shipments pick up and import demand in North America recovers after stalling in 2016.
Stronger growth, particularly in China and the United States, has boosted demand for imports, which spurs intra-Asia trade as demand is transmitted through regional supply chains, the WTO explained.
Chinese demand in the first half of 2017 was driven by solid growth in industry and even stronger growth in services. Financial conditions in Asia have also improved compared to the volatile first quarter of 2016, contributing to business and consumer confidence, the WTO added.
Meanwhile, the WTO noted that the partial recovery of oil prices in 2017 also appears to have provided some support for investment in the United States, growth of which slowed abruptly in 2016, particularly in the energy sector, but picked up in the first half of this year.
However, the WTO estimated that the rapid pace of trade growth this year is unlikely to be sustained, while expecting moderate trade growth in 2018 of around 3.2 percent.