Global trade growing at slowest pace since financial crisis
Trade is growing at its slowest pace since the financial crisis amid crumbling commodity prices and a globalisation backlash, the World Trade Organisation (WTO) has said.
The body which sets the standards for global trade said the total value of exports and imports will rise by just 1.7 per cent this year, a massive reduction from its 2.8 per cent growth forecast made in April. That would mark the weakest growth since 2009 and a rare year where trade expands slower than the global economy.
The WTO also slashed its outlook for 2017, predicting trade to grow by between 1.8 per cent and 3.1 per cent, down from its previous expectations of 3.6 per cent.
Weak commodity prices, which hit the ability of resource-heavy countries to pay for imported goods and services, and slowing GDP growth were blamed for the “dramatic” slowdown.
Roberto Azevedo, director general of the WTO, said the figures were “serious and should serve as a wake-up call.”
He added: “It is particularly concerning in the context of growing anti-globalisation sentiment. We need to make sure that this does not translate into misguided policies that could make the situation much worse.
“While the benefits of trade are clear, it is also clear that they need to be shared more widely. We should seek to build a more inclusive trading system that goes further to support poorer countries. This is a moment to heed to lessons of history and recommit to openness in trade, which can help to spur economic growth.”
The WTO, which warned the UK would face a £9bn spike in import taxes if it voted to leave the EU, also said it did not expect the UK to fall into a recession as a result fo the Brexit vote.
“The UK referendum did not produce an immediately observable downturn in economic activity, as measured by industrial production or employment,” the body said in its trade update. “Economic forecasts for the UK in 2017 range from fairly optimistic to quite pessimistic. Our forecast assumes an intermediate case, with a growth slowdown next year, but not an outright recession.”