World Trade Growth is Expected to Remain Strong

World merchandise trade growth is expected to remain strong in 2018 and 2019 after posting its largest increase in six years in 2017, but continued expansion depends on robust global economic growth and governments pursuing appropriate monetary, fiscal and especially trade policies, WTO economists said. The WTO anticipates merchandise trade volume growth of 4.4% in 2018 and 4.0 percent in 2019, as measured by the average of exports and imports, accompanied by GDP growth of 3.2% at market exchange rates.

Faster trade expansion is being driven by stronger economic growth across regions, led by increased investment and fiscal expansion. Trade growth in 2018 is likely to fall within a range from 3.1% to 5.5% if current GDP forecasts come to pass, although a continued escalation of trade restrictive policies could lead to a significantly lower figure.

WTO Director-General Roberto Azevêdo said:

The strong trade growth that we are seeing today will be vital for continued economic growth and recovery and to support job creation. However this important progress could be quickly undermined if governments resort to restrictive trade policies, especially in a tit-for-tat process that could lead to an unmanageable escalation. A cycle of retaliation is the last thing the world economy needs. The pressing trade problems confronting WTO Members is best tackled through collective action. I urge governments to show restraint and settle their differences through dialogue and serious engagement.

Trade growth should moderate to 4.0% in 2019 even as global GDP growth slows slightly to 3.1%. The ratio of trade growth to GDP growth should remain at 1.4 in 2018, down slightly from 1.5 in 2017. Risks are centred on trade and monetary policy, where missteps could undermine economic growth and confidence.

For more on the WTO’s forecast, see the press release at wto.org.