WTO Cuts Global Trade Outlook for 2013
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The World Trade Organisation on Wednesday cut its trade forecast for 2013, citing risks from the eurozone crisis and rising protectionism.
Global trade is now expected to grow by 3.3 percent, the WTO said, down from its earlier forecast of 4.5 percent.
The world body also said trade flows grew just 2 percent in 2012, the smallest annual rise since records began in 1981 and the second weakest figure on record after 2009, when trade shrank.
The World Trade Organisation on Wednesday cut its trade forecast for 2013, citing risks from the eurozone crisis and rising protectionism.
Global trade is now expected to grow by 3.3 percent, the WTO said, down from its earlier forecast of 4.5 percent.
The world body also said trade flows grew just 2 percent in 2012, the smallest annual rise since records began in 1981 and the second weakest figure on record after 2009, when trade shrank.
The WTO had earlier forecast a 3.7 percent rise in trade in 2012, based on what WTO economist Coleman Nee described as assumptions that the European Union was “getting its act together” financially.
“The final trade figures for 2012 are quite sobering,” WTO director-general Pascal Lamy told reporters before adding that 2013 would see “more of the same.”
“The threat of protectionism may be greater now than at any time since the start of the crisis, since other policies to restore growth have been tried and found wanting,” he said, referring to what he called dissatisfactory results from “conventional monetary and fiscal policies.
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Overall, trade growth remains well below the 5.3 percent rate it averaged over the last 20 years and Lamy emphasied that it is increasingly clear that the world economy is running at “double speed”, with developing countries outperforming richer nations.
Last year, developed economies notched a paltry 1 percent increase in their exports while shipments from developing economies grew 3.3 percent. The disparity between developed and developing economies was still more dramatic on the import side, WTO figures show. Among developed economies, imports fell 0.1 percent in 2012, while they rose 4.6 percent among developing economies.
In a statement, the WTO that “improved economic prospects for the United States in 2013 should only partly offset the continued weakness in the European Union, whose economy is expected to remain flat or even contract slightly this year according to consensus estimates.”
“China’s growth should continue to outpace other leading economies, cushioning the slowdown, but exports will still be constrained by weak demand in Europe,” it added.
As a result, this year looks set to be a “near repeat” of 2012, with both trade and output expanding slowly, though trade was expected to pick up a bit next year.
“Our view is that 2014 should be looking more like 5.0 percent growth,” Lamy said.
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