WTO lowers forecast for world trade growth in 2015

World Trade Organization (WTO) economists have lowered their forecast for world trade growth in 2015 to 2.8 percent, from the 3.3 percent forecast made in April, and reduced their estimate for 2016 to 3.9 percent from 4.0 percent.

According to a statement issued by WTO Wednesday, these revisions reflect a number of factors that weighed on the global economy in the first half of 2015, including falling import demand in China, Brazil and other emerging economies; falling prices for oil and other primary commodities; and significant exchange rate fluctuations.

Volatility in financial markets, uncertainty over the changing stance of monetary policy in the United States and mixed recent economic data have clouded the outlook for the world economy and trade in the second half of the year and beyond.

If current projections are realized, 2015 will mark the fourth consecutive year in which annual trade growth has fallen below 3 percent and the fourth year where trade has grown at roughly the same rate as world GDP (gross domestic product), rather than twice as fast, as was the case in the 1990s and early 2000s.

"Trade can act as a catalyst for economic growth. At a time of great uncertainty, increased trade could help reinvigorate the global economy and lift prospects for development and poverty alleviation. WTO members can help to set trade growth on a more robust trajectory by seizing the initiative on a number of fronts, notably by negotiating concrete outcomes by our December Ministerial Conference in Nairobi," said Roberto Azervedo, director-general of WTO.

Global output is still expanding at a moderate pace but risks to the world economy are increasingly on the downside. These include a sharper-than-expected slowdown in emerging and developing economies, the possibility of destabilizing financial flows from an eventual interest rate rise by the U.S. Federal Reserve, and unanticipated costs associated with the migration crisis in Europe. Endit