The WTO lowered the forecast of growth of world trade

ВТО понизила прогноз роста мировой торговли

Trade cannot stimulate economic growth in conditions of high uncertainty, the head of the WTO Roberto Azevedo.

The world trade organization predicts slowdown in world merchandise trade in 2019 to 2.6% compared to 3% in 2018. This is stated in the report on the website of the WTO, published on Tuesday, April 2.

In the previous forecast, published in September of last year, WTO experts had expected growth of 3.7%. However, the growth started to slow down in 2018. Although the WTO predicted that the volume of world trade will increase by 3.9%, and actually increased by 3%.

The main reason for the deterioration of the situation in the fourth quarter, when the volume of world trade fell by 0.3%. Just at the end of the third quarter, the U.S. announced the introduction of new duties against China.

“Trade cannot stimulate economic growth in conditions of high uncertainty, which is observed now,” said WTO chief Roberto Azevedo.

WTO experts have identified several reasons for the slower growth in 2018, including:

  • the increase of import duties in the United States and China;
  • weaker global economic growth compared to expectations;
  • instability in the financial markets;
  • the reduction effect of stimulating fiscal policy in the United States;
  • the end of loose monetary policy in the Euro area;
  • the transformation of the Chinese economy, which is accompanied by a transition from growth through production and investment to growth through consumption and the services sector.

The WTO noted that the effect of Brexit for the global trade is difficult to assess – the consequences will depend on the final agreement between the UK and the European Union. But it will probably lead to lower investments in the UK, and then performance.

Earlier, the IMF has lowered its forecast for global GDP growth to 3.5% from 3.7%. In the economies of the CIS countries, excluding Russia, the IMF predicts stronger growth.

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