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WTO upgrades forecast for 2017 as trade rebounds strongly

Xinhua | Updated: 2017-09-22 08:50
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GENEVA - The World Trade Organization (WTO) on Thursday revised upward its forecast for global trade growth in 2017 to 3.6 percent, from the previous estimate of 2.4 percent, citing a sharp acceleration in global trade growth in the first half of the year.

According to WTO economists, stronger growth in 2017 was attributed to a resurgence of Asian trade flows as intra-regional shipments picked up and as import demand in North America recovered after stalling in 2016.

Stronger growth particularly in China and the United States boosted demand for imports, which spurred intra-Asia trade as demand was transmitted through regional supply chains, the WTO explained.

Chinese demand in the first half of 2017 was driven by solid growth in industry and even stronger growth in services. Financial conditions in Asia also improved compared to the volatile first quarter of 2016, contributing to business and consumer confidence, the WTO added.

Meanwhile, the WTO noted that the partial recovery of oil prices in 2017 also appears to have provided some support for investment in the United States, growth of which slowed abruptly in 2016, particularly in the energy sector, but has picked up in the first half of this year.

However, the WTO estimated that the rapid pace of trade growth this year is unlikely to be sustained, while expecting a moderate trade growth in 2018 to around 3.2 percent.

WTO Director-General Roberto Azevedo warned that, while the improved outlook for trade is welcome news, substantial risks that threaten the world economy remain in place and could easily undermine any trade recovery.

"These risks include the possibility that protectionist rhetoric translates into trade restrictive actions, a worrying rise in global geopolitical tensions and a rising economic toll from natural disasters," he added.

He urged world economies to continue to resist the temptations of protectionism and work together with their partners in the multilateral system to ensure that gains from trade are both large and widely shared.

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