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September 28, 2018
WTO says rising trade tensions will slow global trade growth
According to the latest estimate from the World Trade Organization (WTO) global trade will continue to expand but at a more moderate pace than previously forecast.
The WTO anticipates a growth in merchandise trade volume of 3.9% in 2018, with trade expansion slowing further to 3.7% in 2019.
Some of the downside risks identified in the April trade estimate - then forecasting a trade growth of 4.4% in 2018 - have since materialized, most notably a rise in actual and proposed trade measures targeting a variety of exports from large economies.
According to the WTO the direct economic effects of these measures have been modest to date but the uncertainty they generate may already be having an impact through reduced investment spending. Monetary policy tightening in developed economies has also contributed to volatility in exchange rates and may continue to do so in the coming months.
WTO Director General Roberto AzevÍdo said: "While trade growth remains strong, this downgrade reflects the heightened tensions that we are seeing between major trading partners. More than ever, it is critical for governments to work through their differences and show restraint. The WTO will continue to support those efforts and ensure that trade remains a driver of better living standards, growth and job creation around the globe."
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