Global trade will grow by only 1.7% in 2016, the slowest since the 2009 financial crisis, the World Trade Organisation said on Tuesday. The estimate is lower than the WTO's April 2016 forecast of 2.8%, with the global gross domestic product growing by 2.2%. The body also revised its 2017 figures to between 1.8% and 3.1% from the earlier estimate of 3.6%.
WTO Director-General Roberto Azevedo said the fall, which was led by slowing GDP and trade growth in developing economies such as Brazil and China, needs to "serve as a wake-up call" for the world. "It is particularly concerning in the context of [the] growing anti-globalisation sentiment. We need to make sure that this does not translate into misguided policies that could make the situation much worse," Azevedo said.
The organisation said its latest estimates emphasised the weakening trade-GDP growth relationship, with trade traditionally growing 1.5 times more. However, the figure has now slipped towards a 1:1 ratio and could possibly fall further this year, for the first time in 15 years.
The WTO's revision comes a little more than two months after the International Monetary Fund cut its forecast for global growth by 0.1%, citing an increase in political and institutional uncertainty following the Brexit vote.