WTO forced to cut trade forecasts

THE World Trade Organisation (WTO) has slashed its forecasts for global trade growth to just 1.2pc for this year and warned that its forecasts for a pick-up next year are subject to “downside risks”.

The outlook for trade is especially important for Ireland, which is one of the most globalised economies in the world and whose growth outlook is tightly tied to demand in the United States.

The Geneva-based body cut its 2019 forecast from the 2.6pc growth it had forecast in April, and reduced its 2020 forecast to 2.7pc from 3pc.

“The darkening outlook for trade is discouraging but not unexpected,” said WTO director-general Roberto Azevedo.

“Job creation may also be hampered as firms employ fewer workers to produce goods and services for export,” he added.

A downturn in manufacturing sentiment here has already started to hit the jobs market, according to a survey by AIB.

Exports have been the driving force of Ireland’s dramatic recovery from the financial crisis, and overall output rose 8.2pc last year and is forecast at around 4pc this year.

The WTO said risks to the forecast are heavily weighted to the downside, and further rounds of tariffs and retaliation could produce a destructive cycle of recrimination, while shifting monetary and fiscal policies might destabilise volatile financial markets.

American president Donald Trump has threatened to ratchet up pressure on China by banning investments there and cutting off the access of Chinese companies to Wall Street.

Mr Trump has also threatened Europe with auto tariffs.