Fed, refugees, China weigh on global trade: WTO

The organization remarked that in case the 2015 projection proves true, this will be the fourth back-to-back year with growth below 3%, and that the rate will be on par with the growth of global Gross Domestic Product (GDP).

“Trade can act as a catalyst for economic growth”.

“At the time of our final forecast in April 2015, world trade and output appeared to be strengthening based mostly on obtainable knowledge by way of 2014 Q4”.

The heaviest downward revisions came from Asia, which saw WTO export growth estimates cut roughly 40 percent and import growth almost by half. Compared to the situation in India and several developing countries – where export is expected to grow slower than the developed world – the global situation looks rosier.

For next year, the WTO revised its world trade growth forecast down to 3.9% from 4.0%.

The WTO said recent financial market volatility and mixed economic data have clouded the outlook for the world economy with risks increasingly on the downside.

WTO members can help set trade growth on a more robust trajectory by seizing the initiative on a number of fronts, notably by negotiating concrete outcomes at the December Ministerial Conference in Nairobi, Azevedo added.

The import forecast for South and Central America in 2015 was lowered sharply to -5.6 percent from -0.5 percent.

Trade growth remains uneven across countries and regions, which shows WTO merchandise trade volume indices by geographical region. It expects the region to post 5.7% import growth next year, after a 5.6% import contraction this year.

Cumulative exports for the April-August 2015-16 at Dollars 111.09 billion registered a 16.17 percent declined over last year’s corresponding period at USD 132.53 billion, continuing the declining trend for month, caused by the global economic slowdown, fall in crude oil prices and appreciation of the rupee.

The forecast will have an adverse implication for India’s exports which have been witnessing continuous decline. This reflects two forces: “a weaker than expected recovery in advanced economies, and a further slowdown in emerging economies, especially in Latin America”, International Monetary Fund managing director Christine Lagarde said in a speech at the University of Indonesia in Jakarta. Other countries in the region should also see imports accelerate as their economies pick up next year. For example, Germany’s exports and imports were both down 14% year on year in dollar terms in July, but they were up 6% in euro terms.