World body expects 2016 to be the worst year for global trade

folarin okunola

September 28, 2016 2:43 PM

Slowing trade is a both a measure of and a cause of poor economic growth.

Roberto Azevêdo

The World Trade Organization (WTO), the global body that regulates international trade, has cut its expectations for worldwide trade this year and the next. The body now expects that this year will be the worst year for world trade growth since the 2008 financial crisis.

Slowing trade is a both a measure of and a cause of poor economic growth. Some of the problem is caused by countries that are big commodity producers, e.g Russia, are now importing less (probably because they are not making as much as they normally do due to low prices and as such have less purchasing power).

Still, the WTO also says restrictive government policies that are preventing trade from growing as much as it could is a risk that is steadily increasing.

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In recent decades, global trade has grown to become a small part of the world's economy. Historically speaking, trade between nations has grown about 1.5 times faster than the overall world economy. But with the WTO's new expectations, there are signs that trade is growing more slowly than the world's economy in 2016 - for only the second time since 1982 and the first time in 15 years.

This basically means that international trade is becoming a smaller part of the global economy, which is very bad news if you belong to the school of thought that, as a whole, trade is a positive force for economic growth.

So who this one epp? Well, stuff like generally result in certain jobs being moved to other countries (e.g a manufacturing company might move its operations to a country with cheaper labor).

With Nigeria in recession and the Naira going through disastrous times, the future is looking less and less optimistic.

folarin okunola