WTO cuts 2016 world trade growth forecast to 2.8 percent

Growth in world trade will come to 2.8 percent this year, lower than a previous forecast of 3.9 percent, the World Trade Organization forecast on Thursday.

It expects trade to rise to 3.6 percent in 2017, breaking through 3.0 percent for the first time in six years. Its forecasts are based on economic growth of 2.4 percent in 2016 and 2.7 percent in 2017.

Over the past five years, the WTO has regularly revised preliminary estimates downwards because of overly optimistic predictions of economic recovery. Since the financial crisis, trade has grown roughly in line with global economic growth, rather than twice as fast in the years before the crisis.

Risks to its latest forecasts were still mostly on the downside, including a sharper than expected slowing of China’s economy, worsening financial market volatility and exposure of countries with large foreign debts to sharp exchange rate movements. Read More…