WTO forecasts global trade growth at 4.7% in 2014
Updated: Apr 15, 2014 02:55:40pm
New Delhi, Apr 15 (KNN) World trade is expected to increase by 4.7 per cent in 2014, better than the average of 2.2 per cent in the past two years, on the backdrop of projected improvements in the developed economies, the World Trade Organisation (WTO) has said.
World trade is expected to grow at a faster rate in 2014, which will provide some support to India's exports that contracted for the second consecutive month in March.
The world trade growth is projected to accelerate to 5.3 per cent in 2015.
"For the last two years trade growth has been sluggish. Looking ahead, if GDP forecasts hold true, we expect a broad-based but modest upturn in 2014, and further consolidation of this growth in 2015," said WTO Director General, Roberto Azevedo.
"It's clear that trade is going to improve as the world economy improves. But I know that just waiting for an automatic increase in trade will not be enough for WTO members," Azevedo said in a statement.
Although the 2014 forecast of 4.7 per cent is more than double the 2.1 per cent increase of last year, it remains below the 20-year average of 5.3 per cent. For the past two years, growth has averaged only 2.2 per cent.
The sluggish pace of trade growth in 2013 was due to a combination of flat import demand in developed economies (0.2 per cent) and moderate import growth in developing economies (4.4 per cent).
On the export side, both developed and developing economies only managed to record small, positive increases (1.5 per cent for developed economies and 3.3 per cent for developing economies).
Trade growth is expected to climb to a long-term average of 5.3 per cent in 2015. The WTO said higher trade growth is assumed on the expectation of a 3.1 per cent expansion in world GDP in 2014 and 3.1 per cent in 2015.
"Prospects for world trade and output in 2014 and 2015 are better than they have been for some time, but leading economies remain fragile, including some of the most dynamic developing countries that until recently were propping up global demand," WTO said.
"Risks to the trade forecast are still mostly on the downside, but there is some upside potential, particularly since trade in developed economies is starting from a low base," WTO added.
The key downside risk to the outlook is the possible financial turbulence in emerging markets from US monetary policy and that in other developed countries.
"Better-than-expected growth in the US could actually provoke further instability in developing economies as it might be interpreted as portending earlier interest rate rises," WTO said. "This in turn could trigger further capital outflows from the developing world as investors seek improved returns in developed countries."
If these risks do not arise, India's exports may grow faster than the world average after a 5 per cent expansion in 2013. Asia's exports are projected to grow 6.9 per cent in 2014 and 7.2 per cent in 2015.
"Concluding the Doha round would provide a strong foundation for trade in the future, and a powerful stimulus in today’s slow growth environment. We are currently discussing new ideas and new approaches which would help us to get the job done and to do it quickly," Azevado said. (KNN/SD)
World trade is expected to grow at a faster rate in 2014, which will provide some support to India's exports that contracted for the second consecutive month in March.
The world trade growth is projected to accelerate to 5.3 per cent in 2015.
"For the last two years trade growth has been sluggish. Looking ahead, if GDP forecasts hold true, we expect a broad-based but modest upturn in 2014, and further consolidation of this growth in 2015," said WTO Director General, Roberto Azevedo.
"It's clear that trade is going to improve as the world economy improves. But I know that just waiting for an automatic increase in trade will not be enough for WTO members," Azevedo said in a statement.
Although the 2014 forecast of 4.7 per cent is more than double the 2.1 per cent increase of last year, it remains below the 20-year average of 5.3 per cent. For the past two years, growth has averaged only 2.2 per cent.
The sluggish pace of trade growth in 2013 was due to a combination of flat import demand in developed economies (0.2 per cent) and moderate import growth in developing economies (4.4 per cent).
On the export side, both developed and developing economies only managed to record small, positive increases (1.5 per cent for developed economies and 3.3 per cent for developing economies).
Trade growth is expected to climb to a long-term average of 5.3 per cent in 2015. The WTO said higher trade growth is assumed on the expectation of a 3.1 per cent expansion in world GDP in 2014 and 3.1 per cent in 2015.
"Prospects for world trade and output in 2014 and 2015 are better than they have been for some time, but leading economies remain fragile, including some of the most dynamic developing countries that until recently were propping up global demand," WTO said.
"Risks to the trade forecast are still mostly on the downside, but there is some upside potential, particularly since trade in developed economies is starting from a low base," WTO added.
The key downside risk to the outlook is the possible financial turbulence in emerging markets from US monetary policy and that in other developed countries.
"Better-than-expected growth in the US could actually provoke further instability in developing economies as it might be interpreted as portending earlier interest rate rises," WTO said. "This in turn could trigger further capital outflows from the developing world as investors seek improved returns in developed countries."
If these risks do not arise, India's exports may grow faster than the world average after a 5 per cent expansion in 2013. Asia's exports are projected to grow 6.9 per cent in 2014 and 7.2 per cent in 2015.
"Concluding the Doha round would provide a strong foundation for trade in the future, and a powerful stimulus in today’s slow growth environment. We are currently discussing new ideas and new approaches which would help us to get the job done and to do it quickly," Azevado said. (KNN/SD)
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