ESCALATING trade tensions and a slowing global economy have led World Trade Organization (WTO) economists to sharply downgrade their forecasts for trade growth in 2019 and 2020.
The news is a major blow to air cargo bosses hoping for an upturn in shipments next year, writes Thelma Etim.
Global trade volumes are now expected to rise by only 1.2 percent in 2019, substantially lower than the 2.6 percent growth forecast in April this year, reveals an official statement from the WTO.
The projected increase in 2020 is now 2.7 per cent, down from 3.0 percent previously. WTO economists caution that “downside risks remain high and that the 2020 projection depends on a return to more normal trade relations.”
Roberto Azevêdo, director-general of the World Trade Organisation, fears that “job creation may also be hampered as firms employ fewer workers to produce goods and services for export.
“The darkening outlook for trade is discouraging but not unexpected. Beyond their direct effects, trade conflicts heighten uncertainty, which is leading some businesses to delay the productivity-enhancing investments that are essential to raising living standards,” Azevêdo observes.
“Resolving trade disagreements would allow WTO members to avoid such costs,” he asserts.
‘The multilateral trading system remains the most important global forum for settling differences and providing solutions for the challenges of the 21st-century global economy. Members should work together in a spirit of cooperation to reform the WTO and make it even stronger and more effective,” he declares.
More tariffs and resulting retaliation could produce a ‘destructive cycle of recrimination,’ the international body also warns.
“A sharper slowing of the global economy could produce an even bigger downturn in trade. Finally, a disorderly Brexit [in the UK] could have a significant regional impact, mostly confined to Europe,” adds the statement.