WTO expects global trade to grow at 2.4% in 2017
NEW DELHI: Global merchandise trade is expected to rebound this year, with the World Trade Organisation forecasting a growth of 2.4% in 2017 compared to 1.3% in 2016.
However, this is contingent on recovery of the global economy as expected and governments pursuing the right policy mix, the international trade regulator said.
The organisation blamed the sluggish rate of trade growth in 2016 on low investment spending in the United States, China's drive towards consumption that dampened import demand last year and slowdown in emerging market economies. It has pegged global merchandise trade to pick up slightly in 2018 and grow 2.1-4%.
"Weak international trade growth in the last few years largely reflects continuing weakness in the global economy. However, if policymakers attempt to address job losses at home with severe restrictions on imports, trade cannot help boost growth and may even constitute a drag on the recovery," WTO director general Roberto Azevedo said on Wednesday after releasing trade statistics for 2016 and projections for 2017 and 2018.
WTO said the unpredictable direction of the global economy in the near term and the lack of clarity about government action on monetary, fiscal and trade policies raises the risk that trade activity will be stifled.
"A spike in inflation leading to higher interest rates, tighter fiscal policies and the imposition of measures to curtail trade could all undermine higher trade growth over the next two years," the WTO said in its report.
In 2016, the weak trade growth was partly due to cyclical factors as economic activity slowed across the board.
"Global economic growth has been unbalanced since the financial crisis, but for the first time in several years all regions of the world economy should experience a synchronised upturn in 2017. This could reinforce growth and provide an additional boost to trade," the report said.
However, this is contingent on recovery of the global economy as expected and governments pursuing the right policy mix, the international trade regulator said.
The organisation blamed the sluggish rate of trade growth in 2016 on low investment spending in the United States, China's drive towards consumption that dampened import demand last year and slowdown in emerging market economies. It has pegged global merchandise trade to pick up slightly in 2018 and grow 2.1-4%.
"Weak international trade growth in the last few years largely reflects continuing weakness in the global economy. However, if policymakers attempt to address job losses at home with severe restrictions on imports, trade cannot help boost growth and may even constitute a drag on the recovery," WTO director general Roberto Azevedo said on Wednesday after releasing trade statistics for 2016 and projections for 2017 and 2018.
WTO said the unpredictable direction of the global economy in the near term and the lack of clarity about government action on monetary, fiscal and trade policies raises the risk that trade activity will be stifled.
"A spike in inflation leading to higher interest rates, tighter fiscal policies and the imposition of measures to curtail trade could all undermine higher trade growth over the next two years," the WTO said in its report.
In 2016, the weak trade growth was partly due to cyclical factors as economic activity slowed across the board.
"Global economic growth has been unbalanced since the financial crisis, but for the first time in several years all regions of the world economy should experience a synchronised upturn in 2017. This could reinforce growth and provide an additional boost to trade," the report said.
