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The World Trade Organisation (WTO) has lowered the projection for world trade growth in 2015 to 2.8 per cent from 3.3 per cent estimated in April this year due to falling import demand from China, drop in commodity prices including oil, and exchange rate fluctuations.
Estimates for 2016 have been lowered to 3.9 per cent from 4 per cent, according to figures released by the WTO on Wednesday.
India, which has seen its exports fall continuously since December 2014, is unlikely to get a respite in the second half of the year, as export growth estimates for 2015 have been lowered most for Asia to 3.1 per cent from 5 per cent in April. This has been largely attributed to falling intra-regional trade because of the slowdown in China’s economy.
“Volatility in financial markets, uncertainty over the changing stance of monetary policy in the US and mixed recent economic data have clouded the outlook for the world economy and trade in the second half of the year and beyond,” the WTO said in a release.
The WTO further warned that if the slowdown in emerging markets worsened, the revised forecasts could still prove to be overly optimistic and global trade growth in 2015 could be lower by half a percentage point more (2.3 per cent).
If current projections are realised, 2015 will mark the fourth consecutive year in which annual trade growth has fallen below 3 per cent and the fourth year where trade has grown at roughly the same rate as world GDP, rather than twice as fast, as was the case in the 1990s and early 2000s, it added.
“On the export side, shipments from developed economies should rise 3 per cent this year and 3.9 per cent next year. Developing economies’ exports are expected to grow more slowly at 2.4 per cent in 2015 and 3.8 per cent in 2016. Imports of developed economies should increase at around the same rate in 2015 (3.1 per cent) and in 2016 (3.2 per cent), while those of developing economies pick up from 2.5 per cent this year to 5.2 per cent next year,” the release said.
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