WTO says global trade rebounds strongly, sees 3.6% growth in 2017

NEW DELHI: Buoyed by a revival import demand in Asia and North America, world trade is expected to grow 3.6% in 2017 well above last year’s lacklustre growth of 1.3%.

The World Trade Organization ( WTO) on Thursday upgraded the forecast for 2017 as "trade rebounds strongly" from its earlier projection of 2.4%.

The stronger growth in 2017 was attributed to a resurgence of Asian trade flows as intra-regional shipments picked up and as import demand in North America recovered after stalling in 2016.

"The improved outlook for trade is welcome news, but substantial risks that threaten the world economy remain in place and could easily undermine any trade recovery,” said WTO Director-General Roberto Azevedo.

These risks include the possibility that protectionist rhetoric translates into trade restrictive actions, a worrying rise in global geopolitical tensions and a rising economic toll from natural disasters.

"However, trade growth was becoming more synchronised across regions than it had been for many years, which could make the current trend self-reinforcing," he said.

However, the multilateral trade body expects the pace to moderate next year and is estimated at 3.2%, within a range of 1.4-4.4%.

This is because the US and euro zone monetary policy expected to tighten and China likely to rein in easy credit to stop its economy from overheating.

The ratio of trade growth to GDP growth, which traditionally ran at about 2:1 but has slumped to about 1:1 in the decade since the financial crisis, should rise this year, with trade growing 1.3 times faster than the global economy, the WTO said.