New Delhi: The WTO on Tuesday sharply cut global trade growth forecasts for 2019 to 1.2 percent from the earlier 2.6 percent, mainly due to trade tensions and sluggish global economy.
This growth projection will not augur well for India, as it is struggling to increase its exports.
"Escalating trade tensions and a slowing global economy have led the World Trade Organisation (WTO) economists to sharply downgrade their forecasts for trade growth in 2019 and 2020," the organisation said in a statement.
World merchandise trade volumes are now expected to rise by only 1.2 percent in 2019, substantially slower than the 2.6 percent growth forecast made in April, it said.
It added that global trade growth is projected to grow at 2.7 percent in 2020, down from the previous projection of 3 percent.
"Risks to the forecast are heavily weighted to the downside and dominated by trade policy. Further rounds of tariffs and retaliation could produce a destructive cycle of recrimination," the World Trade Organisation (WTO) said.
A sharper slowing of the global economy could produce an even bigger downturn in trade, it added.
WTO Director-General Roberto Azevedo said the darkening outlook for trade is discouraging but not unexpected.
"Job creation may also be hampered as firms employ fewer workers to produce goods and services for export," he said, adding "resolving trade disagreements would allow WTO members to avoid such costs".
India's exports dropped by 6.05 percent to $26.13 billion in August mainly on account of significant dip in shipments from key sectors such as petroleum, engineering, leather, and gems & jewellery.
Imports too declined by 13.45 percent to $39.58 billion, narrowing trade deficit to $13.45 billion in August, according to the commerce ministry data.
The imports slipped the most after August 2016, when it had contracted by 14 percent.
Out of 30 key sectors, as many as 22 showed negative growth in August.
Shipments of gems and jewellery, engineering goods, and petroleum products contracted by 3.5 percent, 9.35 percent and 10.73 percent, respectively.
The country's outbound shipments have remained subdued so far this year. It will have implications on the overall economic growth, which has reported over six-year low growth of 5 percent in the first quarter of the current fiscal.
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Updated Date: Oct 01, 2019 18:14:56 IST