The World Trade Organization (WTO) Friday lowered its growth forecast for global merchandise trade, citing economic slowdown in China and the other major world economies and the unresolved debt crisis in the Eurozone.
The WTO downgraded its outlook for international trade growth to 2.5 percent this year from the previous estimate of 3.7 percent. The forecast for 2013 has been revised down to 4.5 percent from 5.6 percent.
The downgrade reflects the ongoing slowdown in China, which is the world's largest exporter, weaknesses in the national output and the employment market in United States and more importantly the unresolved European sovereign debt crisis.
In developed countries, export volumes are expected grow 1.5 percent this year, slower than the earlier prediction for 2 percent gain. The forecast for export growth in developing countries has been downgraded to to 3.5 percent from 5.6 percent.
Imports are expected to grow at slower rates of 0.4 percent in developed countries and 5.4 percent in developing economies in 2012 than the previously estimated 1.9 percent and 6.2 percent respectively.
"In an increasingly interdependent world, economic shocks in one region can quickly spread to others. Recently announced measures to reinforce the euro and boost growth in the United States are therefore extremely welcome," WTO Director-General Pascal Lamy said.
Lamy stressed the need for a renewed commitment to revitalize the multilateral trading system which can restore economic certainty at a time when it is badly needed.
The volume of world trade, as measured by the average of exports and imports, increased a paltry 0.3 percent sequentially in the second quarter, and at an annualized rate of 1.2 percent. The slowdown was drive by strong deceleration in imports of developed countries and by a corresponding weakness in the exports of developing economies, the report said.
by RTT Staff Writer
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