Global trade has run out of steam, according to a study released by the World Bank. The study, entitled Global Economic Prospects, expects global trade to expand more slowly over the next decade than it did in the 30 years before the financial crisis. The reason: slower economic growth and longer-term shifts in trade patterns.

In the three decades leading up to the global financial crises of 2008, the world enjoyed steady 7% growth per year in global trade. According to four World Bank economists who authored the study, trade growth levels have halved for the past two years and should only rise to about 5% over the medium term. They maintain that international trade helped the global economy tide over rough spots in the two decades before the financial crisis, when it grew nearly twice as fast as economic output.

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"Global trade is growing more slowly, not only because world income growth is lower, but also because trade has become less responsive to income growth," the study states.

The study points out that the while the economies of the US and UK have gathered momentum thanks to improving labour markets, accommodative monetary policy, and a flexible approach to fiscal policy monetary policies, recovery remains challenged in the eurozone and Japan.

“China, meanwhile, is undergoing a carefully managed slowdown,” it says. “Disappointing growth in other developing countries in 2014 reflected weak external demand, but also domestic policy tightening, political uncertainties and supply-side constraints.”

Also impacting the global outlook are soft commodity prices, persistently low interest rates (but increasingly divergent monetary policies across major economies), compounded by weak world trade. They acknowledge that the sharp decline in oil prices since mid-2014 will support global activity and help offset some of the headwinds to growth in oil-importing developing economies. However, they contend this will dampen growth prospects for oil-exporting countries, with significant regional repercussions.