16:49 GMT13 July 2020
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    The World Trade Organization (WTO) is forecasting that global trade will expand by 2.4% in 2017, according to report.

    MOSCOW (Sputnik) — The World Trade Organization (WTO) on Wednesday forecast global trade to rebound and grow 2.4 percent this year after some of the lowest growth in decades last year, with major downside risks persisting.

    "The WTO is forecasting that global trade will expand by 2.4% in 2017; however, as deep uncertainty about near-term economic and policy developments raise the forecast risk, this figure is placed within a range of 1.8% to 3.6%," the organization said in its projections.

    This will be followed by growth between 2.1 and 4 percent next year, the forecast said.

    World trade expanded at just 1.3 percent in 2016 amid stagnating economic growth and rising protectionism. This is the slowest expansion since the early 1980s with the exception of the crisis year of 2009 as well as 2000.

    The rebound in trade comes with significant downside risks driven by persisting policy uncertainty, protectionist measures and rising inflation possibly leading to higher interest rates, according to the report. The forecast rate is largely driven by recovering global GDP growth, which is forecast to amount to 2.7 percent this year, up from last year's 2.3 percent.

    "Meanwhile, the possibility of a rise in the application of restrictive trade policies could affect demand and investment flows, and cut economic growth over the medium-to-long term. In light of these factors, there is a significant risk that trade expansion in 2017 will fall into the lower end of the range," WTO said.

    The report also warned about a continued low trade to GDP growth ratio, which remains close to 1:1, a historical low save one-off exceptions. The ratio has persisted since 2012.

    The past year was swept away by a tide of protectionism, with the protectionist measures being rolled out by countries at the fastest rate since the 2008 recession, according to earlier WTO data. Weakening global trade has been further hampered by the United Kingdom's decision to leave the European bloc as well as US President Donald Trump's decision to scrap the Trans-Pacific Partnership (TPP) and focus on bilateral trade deals.


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