World merchandise trade volume is expected to rise 2.8 percent in 2015, down from the previous estimate of 3.3 percent, as slowing import demand in China, Brazil and other emerging economies reduces exports of trading partners.

Trade growth in 2016 should pick up to 3.9 percent, down slightly from the last estimate of 4.0 percent, but still below the average for the last 20 years of 5 percent, says the latest estimate released today by the World Trade Organization.

A further slowing of economic activity in developing economies and financial instability stemming from possible interest rate increases in the United States represent downside risks to the forecast, say WTO economists.

At the time of the last WTO forecast in April 2015, world trade and output appeared to be strengthening based on available data through the fourth quarter of 2014. But results for the first half of 2015 were below expectations as quarterly growth turned negative, averaging ‑0.7% in the first two quarters of this year.

Trade growth figures for North America and Europe were notably healthier than for other regions of the world.

“Trade can act as a catalyst for economic growth,” said WTO Director General Roberto Azevêdo. “At a time of great uncertainty, increased trade could help reinvigorate the global economy and lift prospects for development and poverty alleviation.”

If the current projections come to pass, 2015 will mark the fourth consecutive year in which annual trade growth has fallen below three percent and the fourth year where trade has grown at roughly the same rate as world GDP, rather than twice as fast, as was the case in the 1990s and early 2000s.

The strongest downward revision to the previous export forecast was applied to Asia, where the WTO estimate was lowered to 3.1 percent from 5.0 percent in April.  This is mostly due to falling intra-regional trade as China’s economy has slowed. The downward revision to Asia on the import side was even stronger, from 5.1 percent to 2.6 percent.

The mix of China’s imports are changing, suggesting “that some of the slowdown may be related to the country’s ongoing transition from investment to consumption led growth,” said the WTO report. Imports of machinery and metals were down sharply while strong increases were seen in agricultural products and oilseeds.

The import forecast for South and Central America in 2015 was lowered sharply to -5.6 percent from -0.5 percent.  Much of this reduction is attributed to adverse economic developments in Brazil, which has been simultaneously hit by a fiscal crisis, a financial scandal involving the country’s largest company, and falling export prices. Brazil’s merchandise imports in the second quarter were down 13 percent year on year.

A rebound in South and Central America imports is expected in 2016 as Brazil’s GDP growth stabilizes and its imports start to recover. Other countries in the region should also see imports accelerate as their economies pick up next year, according to the WTO.

Trade growth remains uneven across countries and regions. Europe recorded the fastest year-on-year export growth of any region in the second quarter at 2.7 percent, followed by North America, at 2.1 percent. Africa, the Commonwealth of Independent States, and the Middle East collectively recorded negative export growth. Disparities among regional growth rates were stronger on the import side, with positive growth of 6.5 percent in North America, 3.1 percent in Asia, and 1.6 percent in Europe, and declines of 2.3 percent in South and Central America and 3.1 percent in Africa, the Commonwealth of Independent States, and the Middle East.