Global trade to slow even more than expected: WTO
Growth in global trade in 2012 is likely to slow even more than earlier estimates made in April, said Mr Pascal Lamy, the director-general of the Geneva-based global trading club, the World Trade Organisation (WTO).
Mr Lamy said that the WTO, which has 157 member countries, now estimates that global trade volume will be only 2.5 per cent, from its earlier forecast of 3.7 per cent in April. He called this difference "quite substantial".
In 2011, global trade grew by 5 per cent, a bounce back after it stalled during the 2008-2009 global financial crisis.
The WTO has also had to scale back its global trade growth forecast for 2013 from 5.6 per cent to 4.5 per cent in total volume traded.
"That's a pretty severe downgrading of our forecast in springtime this year - and 3.7 per cent was already considered by many as being very low." Mr Lamy told The Straits Times, just before the start of the Singapore Global Dialogue, a high-profile yearly forum for global thinkers to discuss strategic security issues.
He added that this revised forecast by the WTO included trade among countries within the European Union (EU), and so it was "not surprising" that the EU's economic woes continued to pull down trade figures. He then estimated that the EU would need at least five, if not 10, years to recover from its current crisis.
Also, he noted, the economic outlook was darkened further by China's slowing economy and continuing weak growth and high unemployment in the United States.
All told, he said, the revised WTO forecasts was "worrying confirmation" that globalisation has made countries so economically intertwined with, and dependent on, one another that if one slumped, it would drag many of its trading partners down with it.