Global Economy

WTO cuts global trade growth forecasts to 1.2% for 2019

NEW DELHI: The World Trade Organization (WTO) on Tuesday sharply cut global trade growth forecasts for 2019 to 1.2% from the earlier 2.6%, mainly due to trade tensions and sluggish global economy.

“Escalating trade tensions and a slowing global economy have led WTO economists to sharply downgrade their forecasts for trade growth in 2019 and 2020,” the organisation said in a statement.

World merchandise trade volumes are now expected to rise by only 1.2% in 2019, substantially slower than the 2.6% growth forecast made in April, it said. As per the Geneva-based organisation, downside risks remain high and that the 2020 projection depends on a return to more normal trade relations.

It has lowered its projection for global trade growth to 2.7% in 2020, down from the previous projection of 3%.

A sharper slowing of the global economy could produce an even bigger downturn in trade, it added.

“The darkening outlook for trade is discouraging but not unexpected. Beyond their direct effects, trade conflicts heighten uncertainty, which is leading some businesses to delay the productivity-enhancing investments that are essential to raising living standards,” said WTO Director-General Roberto Azevêdo.

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


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