WTO downgrades global trade growth forecast to 0.5% for next year– www.channelnewsasia.com

WTO downgrades global trade growth forecast to 0.5% for next year– www.channelnewsasia.com
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GENEVA: The World Trade Organization sharply lowered its 2026 forecast for global merchandise trade volume growth to 0.5 per cent on Tuesday (Oct 7), citing expected delayed impacts from US President Donald Trump’s tariffs.

It marks a significant revision down from its previous estimate in August of 1.8 per cent growth.

“The outlook for next year is bleaker … I am very concerned,” Director-General Ngozi Okonjo-Iweala told reporters in Geneva.

However, she said the world trading system is showing resilience, with the rules-based multilateral system providing some stability amid trade turmoil.

For 2025, the WTO upgraded its forecast for global trade volume growth to 2.4 per cent, from 0.9 per cent previously, driven primarily by the front-loading of imports into the United States ahead of tariff hikes and growth in the trade of AI-related goods. It is still below the 2.8 per cent growth seen in 2024.

Trump’s tariff decisions since he took office in January have shocked financial markets and sent a wave of uncertainty through the global economy.

On Aug 7, Trump imposed higher tariffs on imports from dozens of countries, leaving major trade partners like Switzerland, Brazil and India scrambling for a better deal, while the EU struck a deal that set duties at 15 per cent on most EU goods imported into the United States.