World Trade Organization economists are forecasting global trade growth of 2.4 percent in 2017 but are placing this figure within a range of 1.8 percent to 3.6 percent due to “deep uncertainty about near-term economic and policy developments” and “the prolonged period of weak trade growth in recent years.” The WTO is also projecting trade growth of between 2.1 percent and 4.0 percent in 2018 after a weak 1.3 percent increase in 2016.
The WTO said leading indicators of real trade growth are up in the early months of 2017. For example, container throughput of major ports has reached a record high, a key index of world export orders rose to its highest level in several years in February, and estimates of world GDP growth at market exchange rates have risen.
On the other hand, the WTO added, there are a number of clear and significant risks. Growing anti-globalization sentiment and the rise of populist political movements have increased the likelihood of broad trade restrictive measures or the abandonment of existing trade agreements, which could damage consumer and business confidence and undermine international trade and investment. With inflationary pressures building gradually in developed countries, central banks could accelerate their pace of monetary tightening, with negative consequences for economic growth and trade in the short run. Negotiations on the United Kingdom’s pending withdrawal from the European Union will increase uncertainty about the shape of their trade relations in the future.
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