The World Trade Organization (WTO) has lowered its outlook for world commodity trade this year to its lowest level in a decade, citing escalating trade disputes and slowing global economic growth. In its latest report, the World Trade Organization said world trade volume would grow 1.2 percent this year, well below April's 2.6 percent forecast. Growth is expected to improve next year, to 2.7 percent, but less than 3 percent forecasted in April.
According to the WTO, trade disputes pose the greatest negative risk to expectations. Moreover, the outlook for 2020 depends on a return to more normal trade relations.
"The dark outlook for trade is not encouraging but it is not unexpected," said WTO Director-General Roberto Azevedo. “In addition to their immediate effects, trade disputes increase uncertainty, which could push some companies to delay productivity-enhancing investments needed to raise living standards,” added Azevedo. Azevedo urged WTO members to resolve trade disputes and work together in a spirit of cooperation to reform the WTO.
The latest trade forecast is based on the assumption that the global economy will grow 2.3 percent this year and next. The organization warned that a sharp slowdown in the global economy could lead to a further decline in trade. Finally, an uncontrolled Brexit could have a significant regional impact, mostly confined to Europe.
Moreover, the Agency reported that trade-related indicators point to a disturbing course of world trade in all regions, as evident from weak export and import growth in the first half of 2019.