The World Trade Organization (WTO) on Wednesday lowered its growth forecast for global goods trade for this year and the next, citing falling import demand and lower commodity prices.
The Geneva-based organisation now expects global trade to grow 2.8 per cent in 2015 and 3.9 per cent in 2016, down from its April projections of 3.3 per cent and 4 per cent, respectively.
"These revisions reflect a number of factors that weighed on the global economy in the first half of 2015, including falling import demand in China, Brazil and other emerging economies; falling prices for oil and other primary commodities; and significant exchange rate fluctuations," it said.
The WTO said that although data for the last quarter of 2014 showed some strengthening of trade cycles, global goods trade for the first two quarters of 2015 shrank 0.7 per cent on average.
While India has benefited from falling commodity prices, a slump in global demand is hurting exporters. And with Asia and Latin America – home to many emerging economies including China and Brazil – accounting for 53 per cent of India's exports, the going will only get tougher.
Commerce ministry data show India's exports fell for the ninth month in August to $21.26 billion, down by almost 21 per cent from a year earlier. Falling exports could also hurt the government's Make in India initiative to boost manufacturing and drag economic growth lower.
The WTO report also noted that growth would pick up in 2016 but warned that there were downside risks given the financial instability stemming from eventual interest rate rises in the US.