Global trade growth, already weaker than predicted last year, will further slow this year as the EU fights recession and even China’s dynamic growth loses pace, the WTO said on Thursday.
Economic shocks like the eurozone debt crisis are behind an expected slowdown in growth to 3.7 percent, from 5 percent last year, the trade body said.
“Multiple setbacks” last year dampened trade growth more than forecast, according to economists who predicted growth of 5.8 percent for last year in September. In addition to the eurozone crisis, the WTO cited the effects of the Japanese earthquake and tsumani and severe flooding in Thailand.
A year ago, the Geneva-based body had predicted 6.5 percent growth for last year after a rebound of 13.8 percent in 2010 following the financial crisis.
The WTO expects trade to recover somewhat by next year and result in additional growth of 5.6 percent.
“More than three years have passed since the trade collapse of 2008-09, but the world economy and trade remain fragile,” WTO Director-General Pascal Lamy told a news conference at the WTO headquarters.
“The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods,” he said.
The latest WTO forecast assumes growth in global production this year of 2.1 percent (down from 2.4 percent last year), but there are some risk factors, such as a steeper than expected downturn in Europe and rapidly rising oil prices, that could impact on trade even further, it said.
“Recent production data suggests that the European Union may already be in recession, and even China’s dynamic economy appears to be growing more slowly in 2012,” the WTO said.
Asia was the region that recorded the strongest growth in exports (6.6 percent), thanks to a leap of 16.1 percent in India and 9.3 percent in China, though this was considerably down on the 2010 Beijing figure of 28.4 percent.
Last year, the dollar value of world merchandise trade increased 19 percent to US$18.2 trillion, surpassing a 2008 peak of US$16.1 trillion, but owing mainly to higher commodity prices.