GENEVA: The World Trade Organization (WTO) on Thursday downgraded its global trade forecast for this year and next, pointing to escalating trade tensions around the world.
“Escalating trade tensions and tighter credit market conditions in important markets will slow trade growth for the rest of this year and in 2019,” the WTO warned in a statement. “Trade will continue to expand but at a more moderate pace than previously forecast”.
The organization now expects merchandise trade volumes to expand 3.9 per cent this year and 3.7 per cent in 2019, down from an April forecast of 4.4 per cent and 4.0 per cent growth, respectively.
The WTO’s downgrade comes only days after US President Donald Trump’s tariffs on another $200 billion of Chinese imports took effect, with Beijing accusing Washington of “economic intimidation”.
The latest volley against Beijing brings the number of goods hit by duties to more than $250 billion, roughly half of China’s exports to the United States.
The WTO said trade measures and threats since its last report in April were only having a “modest” economic effect for now, “but the uncertainty they generate may already be having an impact through reduced investment spending”.
