Falling import demand, lower commodity prices push down trade growth prospects
Updated: Sep 30, 2015 04:39:48pm
New Delhi, Sept 30 (KNN) World Trade Organisation (WTO) has lowered its forecast for world trade growth in 2015 and also the estimate for 2016 owing to falling import demand and lower commodity prices in the global market.
“WTO economists have lowered their forecast for world trade growth in 2015 to 2.8 per cent, from the 3.3 per cent forecast made in April, and reduced their estimate for 2016 to 3.9 per cent from 4.0 per cent,” an official release said today.
Considering the consistent decline in Indian exports over the last nine months, the forecast will not bode well for India. India’s exports plunged by 20.66 per cent in August to USD 21.26 billion, widening the trade deficit. The slump has been attributed to global slowdown and declining commodity prices worldwide.
The intergovernmental organisation that regulates international trade 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 United States 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 release said.
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.
Commenting on the forecast, Director-General, WTO, Roberto Azevêdo said "Trade can act as a catalyst for economic growth. At a time of great uncertainty, increased trade could help reinvigorate the global economy and lift prospects for development and poverty alleviation.
“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," he added.
According to him at the time of their 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 per cent in Q1 and Q2. (KNN Bureau)
“WTO economists have lowered their forecast for world trade growth in 2015 to 2.8 per cent, from the 3.3 per cent forecast made in April, and reduced their estimate for 2016 to 3.9 per cent from 4.0 per cent,” an official release said today.
Considering the consistent decline in Indian exports over the last nine months, the forecast will not bode well for India. India’s exports plunged by 20.66 per cent in August to USD 21.26 billion, widening the trade deficit. The slump has been attributed to global slowdown and declining commodity prices worldwide.
The intergovernmental organisation that regulates international trade 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 United States 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 release said.
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.
Commenting on the forecast, Director-General, WTO, Roberto Azevêdo said "Trade can act as a catalyst for economic growth. At a time of great uncertainty, increased trade could help reinvigorate the global economy and lift prospects for development and poverty alleviation.
“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," he added.
According to him at the time of their 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 per cent in Q1 and Q2. (KNN Bureau)
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