Uncertainty holds back global trade growth
5 Apr 2019 - by
World trade is still trending down despite hopes that “dynamism and momentum” would lift global mercantile activity.
Speaking after the release of the latest set of facts and figures by the World Trade Organisation (WTO), director general Roberto Azevêdo said world trade had steadily decelerated from 4.6% in 2017 to 3% last year with estimates of 2.6% for the rest of 2019.
“We were optimistic that there was renewed dynamism and momentum in global trade.
“Unfortunately leading indicators have shown momentum weakening – particularly towards the end of last year.”
Thankfully, and in spite of forecasters adjusting their figures for the remaining three quarters of the year, Azevêdo added that “there is potential for a slight improvement in 2020 – but that is very much depending on trade tensions over this period”.
Presumably with Britain’s Brexit problem and the ongoing tariff stand-off between the US and China in mind, he emphasised that “trade simply cannot play its full role in driving GDP growth when levels of uncertainty are so high”.
According to the WTO leader the current mood of uncertainty has a direct effect on investment and consumption, driving expectations down.
“It is increasingly urgent that we resolve tensions and focus on charting a positive path forward for global trade,” Azevêdo said.