The World Trade Organization (WTO) has today (September 30th) revised its 2015 global trade forecast from a 3.3 per cent initial estimate made in April to 2.8 per cent. This is up from a 2.5 per cent growth in 2014. It said world trade could be hampered by a US interest rate rise, China's economic slowdown and Europe's refugee crisis.
Forecasts "include a sharper-than-expected slowdown in emerging and developing economies, the possibility of destabilising financial flows from an eventual interest rate rise by the US Federal Reserve, and unanticipated costs associated with the migration crisis in Europe," the WTO said in a statement.
This means 2015 will be the fourth year in a row with trade growth of less than three per cent, half the annual average in 1990-2008 before the financial crisis hit, Reuters reports.
Forecast for growth in Asian imports were revised to 2.6 per cent, down from a 5.1 per cent projection in April, while Asian exports are now estimated at 3.1 per cent from five per cent.
In 2016, world trade is expected to grow by 3.9 per cent, down from an initial four per cent forecast.
IMF revises down global growth forecast
The downgrade comes a few weeks after the International Monetary Fund (IMF) revised down its global economic growth forecast to 3.3 per cent in 2015, down from a 3.5 per cent initial forecast made in April.
The IMF said this is due to a slower recovery in advanced economies and a further slowdown in emerging nations.
"Overall, we expect global growth to remain moderate and likely weaker than we anticipated last July. This reflects two forces: a weaker than expected recovery in advanced economies, and a further slowdown in emerging economies, especially in Latin America," IMF managing director Christine Lagarde said in a speech at the University of Indonesia in Jakarta.
"Asia as a region is still expected to lead global growth. But even here, the pace is turning out slower than expected – with the risk that it may slow even further given the recent spike in global risk aversion and financial market volatility," she added.
She also warned emerging economies to "be vigilant for spillovers" from China's slowdown, tighter global financial conditions and the prospects of a US interest rate hike.