WTO slashes ’15 trade growth out­look to 3.3%

The China Post - - FRONT PAGE -

Global com­merce is ex­pected to grow just 3.3 per­cent this year, the World Trade Or­ga­ni­za­tion said Tues­day, slash­ing its pre­vi­ous fore­cast of 4.0 per­cent over weak global eco­nomic growth and ris­ing geopo­lit­i­cal ten­sions.

The trade body also said pre­lim­i­nary es­ti­mates showed trade had ex­panded just 2.8 per­cent last year, miss­ing Septem­ber’s fore­cast of 3.1 per­cent.

“Trade growth has been dis­ap­point­ing in re­cent years due largely to pro­longed slug­gish growth in GDP fol­low­ing the fi­nan­cial cri­sis,” said WTO chief Roberto Azevedo.

“Look­ing for­ward, we ex­pect trade to con­tinue its slow re­cov­ery but with eco­nomic growth still frag­ile and con­tin­ued geopo­lit­i­cal ten­sions, this trend could eas­ily be un­der­mined,” he warned.

Last year was the third con­sec­u­tive year in which trade grew less than 3 per­cent.

“With geopo­lit­i­cal growth still frag­ile and geopo­lit­i­cal ten­sions on­go­ing we are cau­tiously fore­cast­ing that trade will con­tinue its slow re­cov­ery,” Azevedo told re­porters.

Trade growth is ex­pected to pick up in 2016 with an ex­pan­sion of 4.0 per­cent, ac­cord­ing to the WTO.

Trade is a key mea­sure of the health of the global econ­omy which it both stim­u­lates and re­flects.

But Azevedo warned Tues­day that a sys­temic shift might be un­der­way and that trade ex­pan­sion would no longer far out­strip over­all eco­nomic growth as it had largely been do­ing for decades.

WTO pointed out that “the 2.8 per­cent rise in world trade in 2014 barely ex­ceeded the in­crease in world GDP for the year, and fore­casts for trade growth in 2015 and 2016 only sur­pass ex­pected out­put growth by a small mar­gin.”

Azevedo said that the 2015 fore­cast was based on an as­sump­tion that global GDP would ex­pand by nearly 3.0 per­cent, while the 2016 fore­cast de­pended on eco­nomic growth reach­ing over three per­cent.

The In­ter­na­tional Mon­e­tary Fund was ex­pected to pub­lish its lat­est global out­put out­look later Tues­day.

A year ago, the WTO was singing a dif­fer­ent tune.

Last April, it had fore­cast that trade would ex­pand 4.6 per­cent in 2014 and 5.8 per­cent this year.

But it down­graded those pre­dic­tions in Septem­ber.

“Con­flict in the Mid­dle East also stoked re­gional in­sta­bil­ity, as did an out­break of Ebola hem­or­rhagic fever in west Africa,” WTO said Tues­day, also point­ing to un­usu­ally harsh win­ter weather in the United States and col­laps­ing world oil prices.

Strong ex­change rate fluc­tu­a­tions had also had a neg­a­tive im­pact.

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