Friday, 28 September 2018

WTO cuts global trade outlook to 3.7% in 2019 as trade tensions escalate -The Total Investment & Insurance Solutions


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28 September 2018

WTO (The Total Investment & Insurance Solutions)



Escalating trade tensions and tighter credit market conditions in important markets would moderate the growth of global merchandise trade to 3.7% in 2019 from 3.9% in 2018, the World Trade Organization (WTO) had said. 

“Trade volume growth should slow to 3.7% in 2019 as global GDP growth dips to 2.9%,” the multilateral trade body said. 

The new forecast for 2018 is below the WTO's April 12 estimate of 4.4% but falls within the 3.1-5.5% growth range indicated at that time. Trade growth in 2018 is now most likely to fall within a range from 3.4-4.4%, it said. 

As per the WTO, North America had the fastest export growth and Asia had the strongest import growth in the first half of 2018 while resource-based economies still struggled. 

While rising trade tensions pose the biggest risk to the forecast, monetary policy tightening and associated financial volatility could also destabilize trade and output. 

As per the organisation, monetary policy tightening in developed economies has also contributed to volatility in exchange rates and may continue to do so in the coming months. 

“Developing and emerging economies could experience capital outflows and financial contagion as developed countries raise interest rates, with negative consequences for trade,” it said. 

It noted that trade-related indicators have shown a loss of momentum, including global export orders and economic policy uncertainty. The Total Investment & Insurance Solutions

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