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WTO: Weak global trade growth to persist in Q2


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WTO: Weak global trade growth to persist in Q2

Global trade growth is expected to remain weak in the second quarter, and the outlook could deteriorate further due to unresolved tensions, the World Trade Organization warned May 20 as it reported that a key world trade indicator stayed at a nine-year low.

The Geneva-based body's World Trade Outlook Indicator stood at 96.3, unchanged from February and still the weakest reading since 2010.

A reading of 100 indicates growth in line with medium-term trends, while readings higher or lower than 100 suggest above-trend or below-trend expansion, respectively.

Five components of the outlook indicator remained below trend, with indexes for international air freight, automobile production and sales, and agricultural raw materials continuing their decline.

"The outlook for trade could worsen further if heightened trade tensions are not resolved or if macroeconomic policy fails to adjust to changing circumstances," the WTO said on its website, noting that the latest outlook indicator do not reflect major trade policies announced recently.

In April, the WTO lowered its merchandise trade volume growth forecast for 2019 to 2.6% from 3.7%, citing risks posed by global trade tensions.

Since that forecast, the U.S. and China have escalated their trade dispute with another round of tariff hikes on each other's goods. Washington has also blacklisted Huawei Technologies Co. Ltd. due to perceived national security threats, forcing some major U.S. chip makers and tech firms to suspend supplies to or business with the Chinese company.

But Washington also eased trade tensions with other countries in recent days, postponing a decision on auto tariffs and agreeing with Canada and Mexico to end tariffs on steel and aluminum imports.

Amid the continued trade tensions, the Organisation for Economic Co-operation and Development further trimmed its global growth forecast for 2019 to 3.1% from 3.3% in March, CNBC reported. The OECD will release its latest economic outlook May 21.