WTO track reduced the growth of world trade next year – Swedish Dagbladet

WTO track reduced the growth of world trade next year – Swedish Dagbladet

World trade grows much slower than previously thought, said the WTO on Tuesday afternoon. In April, it was believed that world trade would grow by 4.7 percent this year, and then was also optimistic about continued strong growth next year.

But now crunching forecasts broken. World trade is thought to only grow by 3.1 percent this year, and four per cent next year.

The downward revision is in response to GDP growth and import demand was weaker than expected in the first half of 2014 is especially true of export regions with very commodities in South and Central America, writes the WTO.

But a strong contributing factor is that the global growth remains shaky and the geopolitical tensions and risks have increased . It puts a damper on the entire world trade.

One example is the tension between the EU and the USA on the one hand, and Russia on the other over the Ukraine, which resulted in trade sanctions on certain agricultural goods. The number of products affected by the sanctions may also increase if the crisis continues, warns WTO.

Conflicts in The Middle East has also led to increased uncertainty and affected trade. This instability may also lead to a sharp rise in oil prices on oil reserves’ safety is threatened, writes the WTO. The outbreak of blödarfebern Ebola in West Africa are also believed to strike against the growth of world trade, something that was difficult to predict in April when the disease affected region.

Ebola outbreak has proved difficult to control, and a spread of the disease can trigger Widespread Panic with serious economic consequences for West Africa – and perhaps even beyond this region, according to the WTO.

All these causes makes the growth of world trade is particularly difficult to predict this year, explains WTO economists.

– International institutions have revised down their GDP forecasts after disappointing economic growth during the first six months. Therefore, WTO forecasts for 2014 and 2015 also reduced. Shaky growth and geopolitical tensions are said to constitute a risk of trade and production in the next six months, says Roberto Azevedo, Director General of the WTO.

He adds, however, some hopeful:

– This is a time when we should remind ourselves that trade can play a positive role. Lower trading costs and more trading opportunities can be key to reversing this trend.