Global trade uncertainty and tighter credit market conditions will slow commerce growth for the rest of this year and in 2019, according to the World Trade Organization (WTO).
Trade will continue to expand but at a more moderate pace than previously forecast, it said.
The new forecast for 2018 is below the WTO’s 12 April estimate of 4.4 percent but falls within the 3.1 percent to 5.5 percent growth range indicated at that time. “Trade growth in 2018 is now most likely to fall within a range from 3.4 percent to 4.4 percent.”
Next year’s trade volume growth is expected to slow to 3.7 percent as global GDP growth dips to 2.9 percent. WTO said that rising trade tensions pose the biggest risk to the forecast, but monetary policy tightening and associated financial volatility could also destabilize trade and output.
“While trade growth remains strong, this downgrade reflects the heightened tensions that we are seeing between major trading partners. More than ever, it is critical for governments to work through their differences and show restraint,” said WTO Director General Roberto Azevedo.
“The WTO will continue to support those efforts and ensure that trade remains a driver of better living standards, growth and job creation around the globe,” he added.
The WTO chief also called on the global community to develop efforts to avert a global trade war.