Growth in world trade will come to 2.8 percent this year, lower than a previous forecast of 3.9 percent, the World Trade Organization forecast on Thursday.
Risks to these latest forecasts were mostly on the downside, including a sharper than expected slowing of China’s economy, worsening financial market volatility and exposure of countries with large foreign debts to sharp exchange rate movements.
Nevertheless the organisation says that it expects trade to rise to 3.6 percent in 2017, breaking through 3.0 percent for the first time in six years. Its forecasts are based on economic growth of 2.4 percent in 2016 and 2.7 percent in 2017.
Over the past five years, the WTO has regularly revised preliminary estimates downwards because of overly optimistic predictions of economic recovery. Since the financial crisis, trade has grown roughly in line with global economic growth, rather than twice as fast in the years before the crisis.
However, there is also some limited scope for upside potential, if monetary policy which is already in place succeeds in lifting the euro area.
“However, there is also some limited scope for upside potential, if monetary policy which is already in place succeeds in lifting the euro area,” WTO Director-General Roberto Azevedo told a news conference.
Global goods trade grew by 2.8 percent in 2015, based on volume, but in value terms exports slumped by 13.5 percent as the rising dollar and collapsing commodity prices hammered the value of exports in every region.
The value of services exports also fell, by 6.4 percent, although that too was exacerbated by the commodities slowdown, as dry bulk cargo shipping prices fell to record lows.