WTO sees trade growth falling to 3.7 percent in 2012
By Tom Miles
GENEVA (Reuters) - World trade growth will slow for a second year to 3.7 percent in 2012 but "severe" downside risks could drive it further below the 20-year average of 5.4 percent, the World Trade Organization forecast on Thursday.
Trade growth slowed to 5.0 percent in 2011 from 13.8 percent in 2010, and is provisionally expected to rebound to 5.6 percent in 2013. The figure for 2011 was worse than a provisional forecast of 5.8 percent issued in September.
"We are not yet out of the woods," WTO Director General Pascal Lamy said.
"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."
The main downside threats to trade growth this year were from a deep recession in the euro zone, a worsening sovereign debt crisis and commodity prices, as well as geopolitical risks.
Lamy said this year's trade outlook was largely dependent on the seemingly diverging fortunes of the European and U.S. economies, the world's top two trading powers.
"Which of these two developments will exert greater influence on global demand this year will in large part determine the course of trade in 2012," Lamy told a news conference.
The 2012 forecast, based on projected global economic growth of 2.1 percent, includes a slump in exports of goods from developed countries to 2.0 percent from 4.7 percent in 2011. Continued...