A huge downward revision from the World Trade Organization... as it took an ax to its global trade growth forecast for this year.
Our Ko Roon-hee tells us why.
The outlook for the world economy remains bleak...as an intergovernmental trade organization is warning world trade will continue to face strong headwinds in 2019.
The WTO announced Tuesday...that world trade is expected to grow by 2-point-6 percent this year...which is sharply down from its earlier forecast of 3-point-7 percent made in September last year.
The actual figure for 2018 was 3-percent...far lower than its outlook of 3-point-9 percent.
As for why it changed its 2019 outlook, the WTO pointed to the ongoing trade spat between the world's two biggest economies.
"The fact that we don't have great news today should surprise no one who has been reading the papers over the last 12 months. Of course there are other elements at play, but rising trade tensions are the major factor to the stories today. Over the last year, we have seen a range of new tariffs put in place, affecting widely traded goods."
Other reasons include slower economic growth in North America, Europe and Asia.
The WTO also says...the effect of the Trump administration's expansionary fiscal policy is diminishing.
Another reason is China changing its focus to services and consumption...from manufacturing and investment.
A chief economist at the WTO added...that the situation might get worse if the U.S. decides to impose tariffs on imported cars...which could be up to 25 percent.
Then how will this change affect South Korea?
An expert in the field says the downturn could harm the export-based economy.
"In Korea, the trade volume is around 70-percent of GDP. This figure is higher than other countries. So slower trade growth is negative for the nation's exports and economic growth."
The expert added that local companies should focus on diversification of export products and destinations... and build relationships with emerging markets abroad.
Ko Roon-hee, Arirang News.