Geneva - Global merchandise trade is expected to grow at a higher 3.6% in 2017, compared with 1.6% increase last year, on the back of resurgent Asian trade flows, according to revised estimates published by the World Trade Organisation (WTO) on Thursday.
The WTO had earlier projected the world trade to grow at 2.4% in 2017. The improved outlook is based on the fact that intra-regional shipments boosted Asian trade and import demand in North America recovered after falling last year.
"The improved outlook for trade is welcome news, but substantial risks that threaten the world economy remain in place and could easily undermine any trade recovery," WTO Director General Roberto Azevedo said in a statement here.
"These risks include the possibility that protectionist rhetoric translates into trade restrictive actions, a worrying rise in global geopolitical tensions and a rising economic toll from natural disasters.
"However, trade growth was becoming more synchronised across regions than it had been for many years, which could make the current trend self-reinforcing," he said.
The report expects the pace of trade growth to moderate next year and estimated it to grow at 3.2%, within a range of 1.4-4.4%.
"First, trade growth in 2018 will not be measured against a weak base year, as is the case this year. Second, monetary policy is expected to tighten in developed countries as the Federal Reserve gradually raises interest rates in the US and the European Central Bank looks to phase out quantitative easing in the euro area," it said.
Moreover, fiscal expansion and easy credit in China are likely to be get tighter in order to prevent the economy from overheating adding to the drag on trade growth next year, it added.