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World Trade Outlook Indicator stays at nine-year low, significant risks on the downside

World Trade Outlook Indicator (WTOI) is unchanged at 96.3 in May, same as February’s reading, which was the lowest level since 2010. The indicator suggests that world trade growth is likely to remain weak into Q2. Also, recent major trade measures announced were not included in the the calculations yet. Thus, outlook would worsen further ahead if  heightened trade tensions are not resolved or if macroeconomic policy fails to adjust to changing circumstances.

WTO also recapped that in the April forecasts, global merchandise trade growth would slowed to 2.6% in 2019, down from 3.0% in 2018. Though, rebound is expected to 3.0% in 2020. However, “there are significant downside risks to the 2019 forecast. Any rebound in 2020 would depend on reduced trade tensions and/or improved macroeconomic performance. ”

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