Global trade is expected to increase by 4.7 per cent in 2014, better than the average of 2.2 per cent in the past two years, on the back of projected improvements in the developed economies, the World Trade Organisation (WTO) said.
The world trade growth is projected to accelerate to 5.3 per cent in 2015. “For the last two years trade growth has been sluggish. Looking ahead, if GDP forecasts hold true, we expect a broad-based but modest upturn in 2014, and further consolidation of this growth in 2015,” said WTO Director General Roberto Azevedo.
“It’s clear that trade is going to improve as the world economy improves. But I know that just waiting for an automatic increase in trade will not be enough for WTO members,” Mr. Azevedo said in a statement.
Although the 2014 forecast of 4.7 per cent is more than double the 2.1 per cent increase of last year, it remains below the 20-year average of 5.3 per cent. For the past two years, growth has averaged only 2.2 per cent.
The sluggish pace of trade growth in 2013 was due to a combination of flat import demand in developed economies (0.2 per cent) and moderate import growth in developing economies (4.4 per cent).
On the export side, both developed and developing economies only managed to record small, positive increases (1.5 per cent for developed economies and 3.3 per cent for developing economies).
In 2013, the dollar value of world merchandise exports rose 2.1 per cent to $18.8 trillion, while the value of world commercial services exports rose 5.5 per cent to $4.6 trillion.
The trade forecast for 2014 is premised on an assumption of 3 percent growth in world GDP growth at market exchange rates, while the forecast for 2015 assumes output growth of 3.1 percent.
“Risks to the trade forecast are still mostly on the downside, but there is some upside potential, particularly since trade in developed economies is starting from a low base,” the WTO said.
However, volatility is likely to be a defining feature of 2014 as monetary policy in developed economies becomes less accommodative, it said.
“Concluding the Doha round would provide a strong foundation for trade in the future, and a powerful stimulus in today’s slow growth environment. We are currently discussing new ideas and new approaches which would help us to get the job done and to do it quickly,” Mr. Azevedo said.