WTO reports on global trade developments in 2018
On 2 April, WTO announced that world trade will continue to face strong headwinds in 2019 and 2020 after growing more slowly than expected in 2018. WTO economists expect merchandise trade volume growth to fall to 2.6% in 2019 — down from 3.0% in 2018. Trade growth could then rebound to 3.0% in 2020, however, this would depend on easing of trade tensions.
Trade growth in 2018 was weighed down by several factors, including, inter alia, new tariffs and retaliatory measures affecting widely-traded goods, weaker global economic growth, volatility in financial markets and tighter monetary conditions in developed countries. The slowdown in merchandise trade volume growth in 2018 was broad based, reflecting weaker import demand in both developed and developing countries, although some regions were more strongly affected than others. The deceleration of trade in 2018 was driven primarily by Europe and Asia due to their large share in world imports (37% and 35%, respectively). The WTO notes that heightened trade tensions cannot explain all of the trade slowdown but they undoubtedly played a significant role as consumers and firms anticipated new trade measures taking effect.
Forward-looking trade indicators have turned negative in recent months, including the WTO's World Trade Outlook Indicator (WTOI). In February the WTOI index fell to 96.3, below its baseline value of 100, signalling slowing trade growth into the first quarter of 2019.
Source and full report: World Trade Organization