Geneva : Multilateral body WTO on Wednesday lowered its trade growth forecast to 2.8% from 3% for this year due to falling import demand and lower commodity prices in the global market.
It has also lowered the trade growth projections for 2016 to 3.9% from 4%.
“WTO economists have lowered their forecast for world trade growth in 2015 to 2.8%, from the 3.3% forecast made in April, and reduced their estimate for 2016 to 3.9% from 4%,” WTO said in a statement.
The forecast will have an adverse implication for India’s exports which have been witnessing continuous decline.
India’s exports contracted for the ninth month in a row, dipping 20.66% in August to $21.26 billion, due to steep decline in engineering and petroleum shipments.
The WTO said that these revisions reflect a number of factors that weighed on the global economy in the first half of 2015, including falling import demand in China, Brazil and other emerging economies, falling prices for oil and other primary commodities, and significant exchange rate fluctuations.
“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,” it said.
It added that if the current projections are realised, 2015 will mark the fourth consecutive year in which annual trade growth has fallen below 3% 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.
“WTO members can help to set trade growth on a more robust trajectory by seizing the initiative on a number of fronts, notably by negotiating concrete outcomes by our December Ministerial Conference in Nairobi,” said WTO’s Roberto Azevedo.
“At the time of our last forecast in April 2015, world trade and output appeared to be strengthening based on available data through 2014 Q4.
“However, results for the first half of 2015 were below expectations as quarterly growth turned negative, averaging -0.7% in Q1 and Q2,” the WTO added.