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6 July 2020 (closed)
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An alarming report was released by the World Trade Organization (WTO) on 1 October 2019. In the report the WTO notes that ongoing global trade tensions, led by tariff troubles between the United States and China, are doing harm to global economic growth in ways not seen since the financial crisis one decade ago.
Only six months ago, the WTO expected world trade in merchandise to grow at a pace of 2.6 percent year-on-year (y/y) in 2019. In its latest report, however, the Switzerland-based organization revised down this forecast to a very modest 1.2 percent (y/y). If accurate, it would make 2019 the weakest trade year since 2009, when merchandise trade plunged by nearly 13 percent (y/y) amid the worst global financial crisis since the Great Depression.
Meanwhile, the WTO also decided to cut its global economic growth forecast for 2019 from 2.6 percent (y/y) to 2.3 percent (y/y). This revision is in line with conclusions that were drawn earlier by the World Bank, the Organisation for Economic Co-operation and Development (OECD), and the International Monetary Fund (IMF).
While a global recession remains unlikely at this point – even as global economic growth slows – risks are mounting, threatening to spread from the factory floor (as manufacturing activity is slowing in major industrial nations) to households in various major economies.
The WTO warns that slowing global trade and economic growth pose a direct threat to jobs and livelihoods, while discouraging companies from expanding and innovating. In the first half of 2019, world trade rose by just 0.6 percent, a substantial slowdown from earlier years.
Read the full article in the September 2019 edition of our monthly research report. You can purchase the report by sending an email to email@example.com or a WhatsApp message to the following number: +62(0)8788.410.6944