2019.10.0108:41:00UTC+00WTO Warns Of High Downside Risks As Trade To Grow Least In A Decade

The World Trade Organization slashed its global merchandise trade forecast for this year to the lowest in a decade citing escalating trade disputes and slowing global growth.

In its latest report, released Tuesday, the WTO said global trade volume will expand 1.2 percent this year, which was well below the April projection of 2.6 percent. The growth is forecast to improve next year, to 2.7 percent but down from 3 percent estimated in April.

According to WTO, trade conflicts pose the biggest downside risk to the forecast. Moreover, the outlook for 2020 depends on a return to more normal trade relations.

"The darkening outlook for trade is discouraging but not unexpected," WTO Director-General Roberto Azev?do, said.

"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,"Azevedo added.

Azevedo urged WTO members to resolve trade disagreements and work together in a spirit of cooperation to reform the WTO.

The latest trade forecast is based on the assumption that the global economy will grow 2.3 percent each this year and next.

The organization cautioned that a sharper slowing of the global economy could produce an even bigger downturn in trade. Finally, a disorderly Brexit could have a significant regional impact, mostly confined to Europe.

Moreover, the agency said the trade-related indicators suggest a worrying trajectory for global trade. Across all regions, export and import growth weakened in the first half of 2019.