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Growth in global trade volumes is likely to slow down to 2.6 per cent in 2019 compared to 3 per cent in 2018, due to rising trade tensions between major economic powers and increased economic uncertainty, according to WTO estimates.
Trade growth could then rebound to 3 per cent in 2020, but only if there is an easing of trade tensions, said a WTO report released on Tuesday.
World GDP growth is expected to decline from 2.9 per cent in 2018 to 2.6 per cent in both 2019 and 2020, the report added.
“Trade growth in 2018 was weighed down by several factors, including new tariffs and retaliatory measures affecting widely traded goods, weaker global economic growth, volatility in financial markets and tighter monetary conditions in developed countries, among others,” the report stated.
Trade growth in 2020 is expected to outpace GDP growth due to faster growth in developing economies, it added.
With trade tensions running high, no one should be surprised by this outlook, said WTO Director-General Roberto Azevedo. “Trade cannot play its full role in driving growth when we see such high levels of uncertainty. It is increasingly urgent that we resolve tensions and focus on charting a positive path forward for global trade which responds to the real challenges in today’s economy — such as the technological revolution and the imperative of creating jobs and boosting development,” he said.
The US and China have been engaged in a trade war over the past year, imposing retaliatory duties on imports sourced from each other. Several other countries, too, have become increasingly protectionist, introducing a number of tariff and non-tariff barriers on imports.
The value of merchandise trade was up 10 per cent to $19.48 trillion in 2018, partly due to higher energy prices. The value of commercial services trade rose 8 per cent to $5.80 trillion in 2018, driven by strong import growth in Asia, the report added.
India recorded double-digit growth in commercial services trade on both the export side (11 per cent) and the import side (14 per cent).
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