WTO Lowers Global Trade Growth Forecast
WTO experts are reported to have revised their forecast for the pace of global trade growth. The renewed forecast names figures below the previous ones - 2,6% against 3,7%. It's also interesting to note that the previous forecast for 2018 failed to match the actual figures.
It's interesting to note that the global trade growth started slowing down in 2018. They had expected a 3,9% gain but the actual figures came in at 3%. The key reason for that is said to be a much worse situation in Q4 2018, when the global trade growth dropped all the way down to just 0.3%. This is actually the time when Washington announced new duties on the products exported from China.
Also, the WTO says that amid deep uncertainty seen these days, global trade cannot be seen as something stimulating economic growth. At the same time, the experts name a few reasons for the slowdown:
- higher import duties in China and USA
- unexpectedly weak global economic growth
- unstable financial markets
- decreased efficiency of the tax stimuli practiced by the U.S. authorities
- the end of the monetary easing cycle in the Eurozone
- the transformations going on in the Chinese economy - a switch from production and investments to consumption and services
At the same time, the experts are still having a hard time evaluating the possible consequences of the so-called Brexit for the entire global economy. This will depend on the final agreement between the U.K. and the E.U. Most likely, the Brexit will end up with lower investments in Great Britain, which will result in lower productivity.
In early 2019, the WTO's leading indicators showed a global trade slowdown. Air shipping dropped by 3%, which was caused by a drop in global export orders amid trade talks between the USA and China.
At the same time, Russia has decided to cap the imports of European goods. The Russian representatives have already informed the WTO about this decision. This is Russia's response to the EU's quotes on Russian steel products.
