September 27, 2016
The World Trade Organization (WTO) says global trade will grow more slowly than expected in 2016, expanding by just 1.7%, well below the organization's April forecast of 2.8%.
The WTO forecast for 2017 has also been revised, with trade now expected to grow between 1.8% and 3.1%, down from 3.6% previously.
The downgrade was driven by slowing GDP and trade growth in developing economies such as China and Brazil but also in North America, which had the strongest import growth of any region in 2014-15 but has decelerated since then.
The biggest downward revision to imports from the WTO's April forecast for 2016 applies to South America (-8.3% compared to -4.5% previously) as the recession in Brazil intensified. This was followed by North America, where import growth was revised down from 4.1% to 1.9% as GDP growth came in below earlier projections. Asian import growth was also scaled back to 1.6% from 3.2%, while our forecast for Europe was revised upward from 3.2% to 3.7%.
Export growth in 2016 was downgraded for most regions, with the strongest revisions applied to Asia (0.3% compared to 3.4% in April) and North America (0.7% compared to 3.1%). Meanwhile, South America's export growth is expected to be stronger than previously forecast (4.4% compared 1.9%), benefitting from favourable exchange rate movements.