The World Trade Organization (WTO) lowered its forecast for global trade growth to 3.9% in 2018 and 3.7% in 2019. (The WTO expected 4.4% growth in global trade by the end of 2018 and 4% in 2019). The growth rates slow down significantly over 2017 (4.7%).
According to WTO Director-General Roberto Azevêdo, the decline in forecasts reflects an increase in tension between the largest trading partners.
“Trade escalation and tighter credit conditions will result in trade slowdown by the end of the year and in 2019”. “The increase in trade frictions represents the greatest risk for forecasting, but tight monetary policy and the associated volatility can also destabilise trade and industry,” states the organization’s press release.
“We are meeting at a crucial moment for global trade. Tensions are escalating rapidly. New tariffs announced so far this year cover hundreds of billions of dollars of trade. And at present there is no end in sight. If this trend continues, we could see a real threat to stability and therefore to jobs and growth,” said Robert Azevedo at High-level forum on advancing trade and investment facilitation for development: a Eurasian perspective.
To recap, the International Monetary Fund also downgraded outlook for the global economy in July although its figures are slightly higher than forecasts made by WTO experts. The outlook for world trade volume in goods and services was reduced to 4.8% in 2018 (down 0.3% from the April report) and 4.5% in 2019 (down 0.2%).
Despite the difference in figures, the experts of both organizations expect a noticeable slowdown in the growth of global trade associating this with the increasing global tension.
Sources: imf.org, tass.ru, tks.ru