The World Trade Organisation has slashed its forecast for world trade growth for this year to 2.6 per cent from 3.7 per cent made six months ago on account of the US-China trade war.
The trade war between the two superpowers, however, has opened up opportunities to Indian exporters.
“Our exports to the US and China have increased and the continued trade war would help us gain market access for such products which attract higher tariff in Beijing or Washington.
“However, the global uncertainty poses a challenge for the significant fluctuation in currency, which needs to be hedged to take advantage of the situation,” Ajay Sahai, director- general and CEO of FIEO told The Telegraph.
The WTO’s forecast of 2.6 per cent is the slowest projection since 2016. The trade body has a slightly more optimistic forecast of 3 per cent for 2020. But, that would hinge on parties resolving their conflicts, particularly China and the US.
WTO director-general Roberto Azevedo said in Geneva “with trade tensions running high, no one should be surprised by this outlook. Trade cannot play its full role in driving growth when we see such high levels of uncertainty”. “It is increasingly urgent that we resolve tensions and focus on charting a positive path forward for global trade,” the trade body said in a statement.
“The growth opportunity for the country should be looked at from the perspective of trade war between the US and China,” Sahai said.
Oil price surge
Global merchandise exports stood $19.5 trillion in 2018 — up 10 per cent year-to-year, driven by higher oil prices, which increased about 20 per cent. Saudi Arabia’s oil exports grew 35 per cent, while Russian exports were up 25.6 per cent.