The World Trade Organization on Thursday downgraded its global trade forecast for this year and next, pointing to escalating trade tensions around the world.

"Trade will continue to expand but at a more moderate pace than previously forecast," WTO said in a statement, saying it now expects merchandise trade volumes to expand 3.9 percent this year and 3.7 percent in 2019, down from an April forecast of 4.4 percent and 4.0 percent growth respectively.