World Trade Organisation economists have lowered their forecast for world trade growth in 2015 to 2.8%, from the 3.3% forecast made in April, and reduced their estimate for 2016 to 3.9% from 4.0%.
The lower forecast is due to slowing import demand in China, Brazil and other emerging economies which will reduce exports of trading partners.
The trade growth estimate for 2016 is down slightly from the last estimate of 4.0%, and still below the average for the last 20 years (1995-2015) of 5%.
Risks to the forecast are firmly on the downside, says the WTO, with the most prominent being a further slowing of economic activity in developing economies and financial instability stemming from eventual interest rate rises in the United States.
Asian export and import growth for 2015 has been revised down as slower growth in Chinese imports has reduced intra-regional trade.
South American imports have also been revised down sharply but the region's export volume growth should remain positive in 2015 and 2016, according to the WTO.
“These revisions reflect a number of factors that weighed on the global economy in the first half of 2015, including falling import demand in China, Brazil and other emerging economies; falling prices for oil and other primary commodities; and significant exchange rate fluctuations.
“Volatility in financial markets, uncertainty over the changing stance of monetary policy in the United States, and mixed recent economic data have clouded the outlook for the world economy and trade in the second half of the year and beyond,” reports the WTO.
If current projections are realised, 2015 will mark the fourth consecutive year in which annual trade growth has fallen below 3% and the fourth year where trade has grown at roughly the same rate as world GDP, rather than twice as fast, as was the case in the 1990s and early 2000s.
