WTO Cuts 2014 Trade Growth Forecast to 3.1 Per Cent

Geneva: Global commerce is set to expand by 3.1 per cent this year, the World Trade Organization (WTO) said on Tuesday, cutting its previous forecast of 4.6 per cent due to weak growth and demand.

The Geneva-based body also downgraded its forecast for trade growth in 2015 to 4 per cent from 5.3 per cent.

"International institutions have significantly revised their GDP forecasts after disappointing economic growth in the first half of the year," WTO chief Roberto Azevedo said in a statement.

"In light of this, the WTO's forecasts for trade growth have also been revised downwards for 2014 and 2015. Uneven growth and continuing geopolitical tensions will remain a risk for both trade and output in the second half of the year," he added.

Among the problems, the WTO said, are tensions over the Ukraine crisis pitting the European Union and the United States against Russia.

The resultant tit-for-tat trade measures have notably affected agricultural commodities.

Conflict in the Middle East is also stoking uncertainty, and could lead to a spike in oil prices if the security of supplies is threatened, the WTO said.

And the Ebola outbreak raging in west Africa has also sown panic over its economic impact in the region and potentially beyond, it added.

The WTO noted that growth and import demand was particularly muted in natural resource exporting regions such as South and Central America.

It also pointed to sluggish economic performances in the United States and Germany, which have sapped global import demand.

The 160 economies which make up the WTO set trade rules among themselves in an attempt to ensure a level playing field and spur growth by opening markets and removing trade barriers, including subsidies, excessive taxes and regulations.

But they have failed repeatedly to conclude the Doha Round of trade liberalisation talks launched in 2001 with the stated aim of underpinning development in poorer nations.

"This is a moment to remind ourselves that trade can play a positive role here. Cutting trade costs and broadening trade opportunities can be a key ingredient to reversing this trend," Mr Azevedo said.