The World Trade Organization has issued a marked upward revision of its trade growth forecast for this year. Its regained optimism is based on stronger economic indicators in China, the US and the eurozone.
The WTO said in a press release Thursday it had raised its estimate for growth in world merchandise trade volume this year to 3.6 percent, up from a mere 2.4 percent in its previous forecast.
It said that if the projected expansion materialized, it would mark a substantial improvement on the lackluster 1.3-percent increase 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," the World Trade Organization commented.
"These risks include the possibility that protectionist rhetoric translates into restrictive actions, a worrying rise in global geopolitical tensions and a rising economic toll from natural disasters.
Opportunities and risks
The WTO concluded that since those risks were "very real," increased optimism about trade should be tempered with a healthy dose of caution.
In the same breath, it expressed the hope that the current expansion could be self-reinforcing as current growth was more synchronized across regions than it had been for many years.
Experts noted that GDP growth accelerated in most major economies in the second quarter. They singled out China where quarter-on-quarter expansion rose from 1.3 percent (Q1) to 1.7 percent (Q2), with growth also strengthening in the US and the euro area.
WTO officials warned, though, that the rapid pace of trade expansion in 2017 was unlikely to be sustained throughout next year for a number of reasons.
Factors bound to impact global trade include the expected tightening of monetary policy in developed nations and the reining in of easy credit and fiscal expansion in China where the government looks eager to prevent the economy from overheating.
hg/jd (dpa, Reuters)