Global trade growth to fall further to 3.7% in 2012 – WTO
World trade expanded in 2011 by 5.0%, a sharp deceleration from the 2010 rebound of 13.8%, and growth will slow further still to 3.7% in 2012, the World Trade Organisation (WTO) forecasted on April 12, 2012.
The Organisation attributed the slowdown to the global economy losing “momentum due to a number of shocks, including the European sovereign debt crisis.”
The WTO made these known in its global trade statistics for the year 2011.
“The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods,” WTO Director General Pascal Lamy said in a statement.
Mr Lamy adds that “More than three years have passed since the trade collapse of 2008-09, but the world economy and trade remain fragile.”
According to the WTO, a significant braking of trade expansion had been forecast for 2011, but multiple economic setbacks during the year dampened growth beyond expectations and led to a stronger than anticipated easing in the fourth quarter.
Based on a consensus of economic forecasters, WTO said the present trade forecast assumes global output growth of 2.1% in 2012 at market exchange rates, down from 2.4% in 2011.
However, there are severe downside risks for growth that could have even greater negative consequences for trade if they came to pass. “These include a steeper than expected downturn in Europe, financial contagion related to the sovereign debt crisis, rapidly rising oil prices, and geopolitical risks,” it said.
WTO economists cautioned that preliminary trade figures for 2011 and forecasts for 2012 were difficult to gauge due to the extraordinary levels of volatility in financial markets and in the broader economy for the last few years.
“The preliminary figure of 5.0% for world merchandise trade growth in 2011 is down 0.8 points from their most recent forecast update in September 2011. These figures are in “real” terms, ie, adjusted to account for inflation and exchange rate fluctuations,” it said.
Mr Lamy indicated that the WTO has so far deterred economic nationalism, but the sluggish pace of recovery raises concerns that a steady trickle of restrictive trade measures could gradually undermine the benefits of trade openness.
“It is time to do no harm. WTO members should turn their attention to revitalizing the trading system and to ensuring such a scenario does not materialize,” he said.
By Ekow Quandzie