The World Trade Organization has drastically revised down its 2016 global trade forecast, warning that growth had hit its slowest pace since the global financial crisis. 2017 might not look much better.
WTO officials on Tuesday dramatically cut the organization’s 2016 global trade forecast by more than a percentage point, citing a marked slowing of GDP growth in many nations, including pivotal emerging economies.
The WTO estimated that global trade would expand by just 1.7 percent in 2016, compared with its April projection of 2.8 percent, and compared with a projection a year ago that trade would swell by 3.9 percent this year.
The UN agency also revised down its 2017 forecast, with trade expected to grow between 1.8 percent and 3.1 percent, down from the previously anticipated 3.6 percent for next year.
The organization said the 2016 downgrade followed a sharper-than-expected decline in merchandise trade volumes in the first quarter. The contraction was driven by slowing economic growth in China, Brazil and other nations.
Protectionism no solution
“The dramatic slowing of trade growth is serious and should serve as a wake-up call, WTO Director Robert Azevedo said in a statement.
He voiced particular concern over the slowdown in the context of rising anti-globalization sentiment in many parts of the world.
“We need to make sure that this does not translate into misguided policies that could make the situation much worse, not only from the perspective of trade, but also for job creation and economic growth and development, which are so closely linked to an open trading system,” Azevedo commented.