The World Trade Organisation has raised its forecast for growth in global trade this year to 4.7 per cent, while warning that risks such as the slowdown in developing economies and increasing geopolitical tensions, including in Ukraine, threaten to undermine its recovery.

Several trade economists had expected the WTO to lower its previous 4.5 per cent forecast for this year. In an interview with the Financial Times last week, Roberto Azevêdo, the WTO director-general, said he had yet to detect signs of a significant recovery in global commerce in the first quarter of 2014.

In releasing its latest forecasts on Monday, the WTO said the global recovery and the upturn in the US and especially Europe were likely to lead to stronger-than-expected trade growth.

But it also cautioned that the 4.7 per cent upturn it anticipated remained well below historical trends and, in particular, the pre-crisis average 6 per cent growth seen through most of the 1990s and 2000s.

“Prospects for world trade and output in 2014 and 2015 are better than they have been for some time, but leading economies remain fragile, including some of the most dynamic developing countries that until recently were propping up global demand,” WTO economists wrote. “Downside risks to trade abound.”

While the US and even Europe appeared to be recovering, “developing economies are now the focus of several gathering risks”, they wrote. The list of dangers includes large current account deficits in countries such as India and Turkey, currency crises in places such as Argentina, and China’s attempt to rebalance its economy away from exports and towards domestic consumption.

The Geneva-based organisation also warned that “geopolitical risks have introduced an additional element of uncertainty to the forecast. Civil conflicts and territorial disputes in the Middle East, Asia and eastern Europe could provoke higher energy prices and disrupt trade flows if they escalate.”

Mr Azevêdo used the new forecasts to call for the WTO’s 159 members to step up their efforts to unlock the now-stalled Doha round of trade negotiations.

In Bali last December, the WTO reached the first deal in its history – a relatively modest agreement to remove red tape at borders around the world. The Brazilian is trying to use it to inject new life into the 12-year-old Doha talks.

At the ministerial meeting in Bali, WTO members gave themselves until the end of this year to come up with a plan to move forward with the Doha agenda. However, Mr Azevêdo has been among those expressing concerns in recent weeks that the process may not be moving fast enough.

“It’s clear that trade is going to improve as the world economy improves. But I know that just waiting for an automatic increase in trade will not be enough for WTO members,” he said on Monday.

“Concluding the Doha round would provide a strong foundation for trade in the future, and a powerful stimulus in today’s slow growth environment. We are currently discussing new ideas and new approaches which would help us to get the job done – and to do it quickly,” he added.

The WTO also said global trade grew at a slower than initially thought 2.1 per cent in 2013, down from its 2.5 per cent forecast last September. The reason for this revision, it said, was “a stronger than expected decline in developing economies’ trade flows in the second half of last year”. However, the WTO added that recent business surveys and industrial production data point to a firmer start to 2014 in the US and Europe.

The Financial Times