A recent report by the World Trade Organization is warning that global trade is expected to grow by just 1.7% in 2016, well below earlier projected levels of 2.8%. It was just a year ago the organization had projected as much as a 3.9% rate of growth in 2016. If realized, this would be the slowest global trade growth since the financial crisis of 2009. The Organization also projected global GDP growth of 2.2%.
The Organization attributed the decline to a few different factors, including the now infamous Brexit vote in June and slowing growth of areas like Brazil and China. They also voiced concern that growing anti-trade rhetoric and increasingly volatile monetary policy will make recoveries difficult.
WTO Director General Roberto Azevedo said the report should serve as a wake up call to international communities who have seen increasing calls for protectionist measures.
“The dramatic slowing of trade growth is serious and should serve as a wake-up call. It is particularly concerning in the context of growing anti-globalization sentiment. We need to make sure that this does not translate into misguided policies that could make the situation much worse, not only from the perspective of trade but also for job creation and economic growth and development which are so closely linked to an open trading system”
The 1.7% trade growth would be the first time in 15 years that international trade growth has lagged the growth of the world economy as a whole. The areas seeing the strongest revisions lower compared to the last WTO report in April were Asia, now projected at just 0.3% growth compared to 3.4% in April, and North America revised down to 0.7% compared 3.1% previouslyShare