World Trade Shrinks 10 Percent, Asia Leading the Recovery
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Singapore, 2 August 2009. The WTO reported that world trade will slide 10 percent in 2009, with Asia being the leader in the recovery. The WTO’s June forecast was that global trade would drop only 9 percent.
Yet contradictorily, the WTO said this contraction is losing momentum.[br]
Singapore, 2 August 2009. The WTO reported that world trade will slide 10 percent in 2009, with Asia being the leader in the recovery. The WTO’s June forecast was that global trade would drop only 9 percent.
Yet contradictorily, the WTO said this contraction is losing momentum.[br]
“Our figures showed that Asian countries may be leading a recovery in global trade,” said WTO Director General Pascal Lamy in Singapore, at an Asia Pacific Economic Cooperation (APEC) trade meeting. “There’s no room for complacency.”
Officials at the meeting offered some good news for China, saying that its export slump could start to taper off in the second half of 2009.
Speculation on whether actions taken to boost trade financing were showing results arose. These were introduced after credit markes froze and funding stopped. Firms couldn’t buy or sell and economies slowed dramatically.
Commenting on the WTO measures to accelerate trade, Lamy said, “Has it worked? A bit too soon too say.”
But he was optimistic about such financing in Asia, “This trade finance is in many ways the oil of world trade,” he added. “In this region, it appears that more oil is coming back to the market.”[br]
World trade rose six percent in 2007, but only two percent in real or volume terms in 2008, according to the WTO report.
“However, trade still managed to grow more than global output, as is usually the case when production growth is positive,” it reported. “Conversely, when output growth is declining, trade growth tends to fall even more, as is evident in 2009.”
Germany still kept its edge over China as the largest merchandise exporter in the world, with $1.47 trillion. This is just above China’s exports of $1.43 trillion.
The weak economy in Europe means that China should surpass Germany this year, export-wise. According to China’s commerce minister, its economy is improving and stabilizing.
It is the developing nations that are really showing growth, the WTO said. Their share of world exports hit a record 38 percent last year.
Some developing nations, like Indonesia, have strong domestic consumption and need not entirely rely on exports to fuel their recovery.
On the consumption side, the US remains the largest, importing $2.17 trillion in 2008.
Hiroko Mirafiori, EconomyWatch.com
