WTO Cuts Global Trade Forecast

The Economic Times - - Economy - Kir­tika.Suneja @times­group.com

New Delhi: In­dia is un­likely to get respite from fall­ing ex­ports, ac­cord­ing to the World Trade Or­gan­i­sa­tion’s lat­est forecast for global trade.

The WTO on April 7 cut its forecast for world trade growth in 2016 fur­ther to 2.8% from the ear­lier es­ti­mate of 3.9%. In Septem­ber last year, it had re­vised the es­ti­mate for 2016 down­wards to 3.9% from 4.0%. How­ever, the WTO ex­pects global trade growth to rise to 3.6% in 2017. Growth in the vol­ume of world trade is ex­pected to re­main slug­gish in 2016 at 2.8%, un­changed from the 2.8% in­crease reg­is­tered in 2015. Im­ports of de­vel­oped coun­tries should mod­er­ate this year while de­mand for im­ported goods in de­vel­op­ing Asian economies should pick up. The WTO listed “a sharperthan-ex­pected slow­ing in China (and) wors­en­ing fi­nan­cial mar­ket volatil­ity” as fac­tors that could fur­ther sup­press global trade. “In­di­ca­tors of busi­ness and con­sumer sen­ti­ment have turned more neg­a­tive re­cently. How­ever there is also some lim­ited up­side po­ten­tial if mone­tary pol­icy, which is al­ready in place, suc­ceeds in lift­ing growth in the Euro area,” said WTO di­rec­tor gen­eral Roberto Azevedo. The mul­ti­lat­eral or­gan­i­sa­tion said de­mand in the US and Europe is driv­ing the mod­est growth, mak­ing up for slow­down in Asia and else­where. It cited some up­side po­ten­tial if mone­tary sup­port from the ECB suc­ceeds in gen­er­at­ing faster growth in the euro area.

“Ac­cord­ing to our forecast, 2016 will be the fifth year that world trade will have grown at roughly the same rate as world GDP — rather than twice as fast as was the norm be­fore the fi­nan­cial crisis,” it said.

WTO on April 7 cut its forecast for world trade growth in 2016 fur­ther to 2.8% from 3.9% ear­lier

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