WTO cuts trade forecasts for 2014, 2015

It added that estimated trade growth for 2015 was cut to 4 percent from the previously-expected 5.3 percent, Xinhua reports.

The weaker-than-expected GDP growth and muted import demand in the first half of 2014, particularly in natural resource exporting regions such as South and Central America, were reasons behind the lower forecasts, said WTO economists. In its latest prediction, WTO expected the export of developed economies to grow by 2.5 percent in 2014, and developing economies by 4.0 percent. On the import side, developed economies are estimated to grow 3.4 percent this year, while developing economies will increase 2.6 percent. "International institutions have significantly revised their GDP forecasts after disappointing economic growth in the first half of the year," said Roberto Azevedo, WTO's Director-General, in a statement. He noted that "uneven growth and continuing geopolitical tensions will remain a risk for both trade and output in the second half of the year." Economic growth, though having strengthened somewhat in the past months, has remained unsteady. The contraction of GDP in the first quarter in the United States and in the second quarter in Germany dampened the global import demand, said WTO. The world trade watchdog added that the slowdown of China's growth from 7.7 percent in 2013 to 6.1 percent in the first quarter of 2014 before rebounding in the second was also a factor, noting that the slow first quarter contributed to weak exports in its trading partners. In light of these factors, global trade stagnated in the first half of 2014 as the gradual recovery of import demand in developed countries was offset by declines in developing countries. In spite of expecting the trade growth to be stronger in the second half this year as governments and central banks may provide policy support to boost growth, WTO warned against risky factors that could potentially undermine economic outcomes. It expressed concerns over tension arising from the Ukraine crisis, drawing attention to the resulting trade sanctions on certain agricultural commodities and alerting that the number of products affected could widen if the crisis persists. Besides, conflict in the Middle East is also casting shadows, and could lead to a spike in oil prices if the security of oil supplies is threatened. In addition, possible further spread of the deadly disease Ebola in West Africa could trigger a broader panic with major economic implications for West Africa and perhaps even beyond the region.