WTO expects global trade to rebound in 2017
In a report released Wednesday, WTO said: “global economic growth has been unbalanced since the financial crisis, but for the first time in several years all regions of the world economy should experience a synchronized upturn in 2017.”
“This could reinforce growth and provide an additional boost to trade,” it concluded.
The agency, however, warned that policy shocks could easily undermine the positive trends.
“The unpredictable direction of the global economy in the near term and the lack of clarity about government action on monetary, fiscal and trade policies raises the risk that trade activity will be stifled,” said the WTO.
According to the report, a spike in inflation leading to higher interest rates, tighter fiscal policies and the imposition of measures to curtail trade could all undermine higher trade growth over the next two years.
Global trade grew by "an unusually low" 1.3 percent in 2016, the slowest pace since the financial crisis, failing to match even the revised forecast of 1.7 percent of last September.
"The poor performance over the year was largely due to a significant slowdown in emerging markets where imports basically stagnated last year, barely growing in volume terms," said WTO Director-General Roberto Azevedo.
In 2018, global trade is forecast to grow by between 2.1 percent and 4 percent.
The International Monetary Fund (IMF) also signaled positive trends on Wednesday, saying that after six years of disappointing growth, the world economy is gaining momentum.
“We see a global economy that has a spring in its step—benefiting from sound policy choices in many countries in recent years,” said IMF Managing Director Christine Lagarde.
The IMF has also warned of downside risks such as political uncertainty and tighter global financial conditions, calling on governments to boost productivity.