World Trade Organization cuts global growth forecasts for 2014 and 2015

The World Trade Organization has sharply reduced its forecast for global trade growth this year, pointing to uneven economic growth in countries such as China and the U.S. The WTO said Tuesday that its economists are now predicting 3.1 per cent growth in world trade this year, down from the 4.7 per cent forecast in April. They also cut their outlook for 2015 to 4 per cent from the previous 5.3 per cent. The Geneva-based body said global trade stagnated in the first six months of this year, as a gradual recovery in demand for imports in developed countries was offset by declines in developing countries.

Uneven growth and continuing geopolitical tensions will remain a risk for both trade and output in the second half of the year.

WTO director-general Roberto Azevedo

Conflict in the Middle East is stoking uncertainty, and could lead to a spike in oil prices if the security of supplies is threatened, said the WTO. Meanwhile, the Ebola outbreak in west Africa has also sown panic over its economic impact in the region and potentially beyond. Growth and import demand is particularly muted in natural resource exporting regions such as South and Central America. It also pointed to sluggish economic performances in the United States and Germany, which have sapped global import demand. The 160 economies which make up the WTO set trade rules among themselves in an attempt to ensure a level playing field and spur growth by opening markets and removing trade barriers.

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