GENEVA: The World Trade Organisation (WTO) has cut its 2014 growth forecast from 4.7 percent to 3.1 percent as Europe continues to stagnate and import demand weakens in China and the resource-rich export regions of Central and South America.
The WTO says trade growth should rise in 2015 to four percent - below the average of 5.2 percent for the last 20 years.
At the same time it notes uncertainties persist as tension between the EU/U.S. and the Russian Federation over Ukraine could lead to a widening of sanctions; the growing Middle East conflict could lead to a spike in oil prices if the supply is threatened; and the spread of Ebola could have major economic implications for West Africa and beyond the region.
World trade, as measured by the average of exports and imports, only increased 1.8 percent in the first half of 2014 over the same period in 2013, but is likely to rise for the remainder of the year as imports of developed economies continue to rise.
Asia recorded the fastest export growth of any region in the first half of 2014 with a 4.2 percent rise year-on-year. North America followed at 3.3 percent; Europe was next with 1.2 percent while South and Central America fell 0.8 percent for the period. On the import side, North America rose 3.0 percent followed by Asia with 2.1 percent and Europe with 1.9 percent as South America fell 3.4 percent.
The WTO anticipates a 2.5 percent increase in shipments from developed economies in 2014, followed by a 3.8 percent rise in 2015. Meanwhile, exports of developing economies are expected to grow by 4.0 percent in 2014 and 4.5 percent in 2015.
Imports of developed economies are forecast to rise 3.4 percent this year and 3.7 percent next year, while those of developing economies are expected to increase 2.6 percent in 2014 and 4.5 percent in 2015.
Commenting on the figures, WTO director-general Roberto Azevêdo said: "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."