The World Trade Organization has announced that it is reducing its trade growth forecast to just 1,2 %
The organization’s previous estimate, published in April, stood at 2,6 %. The forecast for the next year was slashed to 2,6 % from 3 %. For comparison, the figure for 2018 was 3 %.
There are several reasons for this development, some of them political, some of them economical. Several countries have reduced their growth estimates, while some, such as Germany have even indicated that a recession may be already starting there.
The political developments are not helping either of course. One of the biggest issues is the escalating trade conflict between USA and China, which may develop into a full-blown trade war, which would likely plunge most of the world into recession. The second major concern is Brexit, or more precisely the continuing uncertainty surrounding it. Since uncertainty is one of the things that make markets really nervous, Brexit is already a mayor issue for UK and some European countries. And a hard Brexit would likely send a shock through most western European countries, which would in turn affect most other European countries.