World trade growth to slow in 2011 after record 2010: WTO

7th April 2011, Comments 0 comments

Growth in global trade is expected to slow to 6.5 percent this year after a record-breaking expansion of 14.5 percent in 2010, the World Trade Organization said Thursday.

Last year's gain came in a recovery from a record slump of 12 percent in 2009 as the global financial crisis sapped growth, meaning all the lost ground was not made up, WTO data showed.

"Large gaps remain on where we are now and where we would have been had the crisis not happened. This gap is likely to persist for some time," WTO head Pascal Lamy said.

While overall world trade is continuing to post above average growth in 2011, risks arising from Middle East unrest and Japan's deadly earthquake are significant.

"Recent events in the Middle East and Japan have raised the level of global economic uncertainty and tilted the balance of risk towards the downside," the WTO said.

"Fears of a prolonged conflict in Libya and spreading unrest in the Middle East have lifted oil prices above $100 per barrel," it noted.

"An interruption of supplies from any other major producer would raise prices higher still, with potentially significant implications for the global economy," it said, warning that such a development could change its forecasts.

The deadly earthquake in Japan is expected to cut exports from the world's fourth largest trading nation by between 0.5 percent and 1.6 percent.

At the same time, the disaster could boost imports into Japan by between 0.4 percent and 1.3 percent, as the country brings in supplies for reconstruction of damaged infrastructure.

The cumulative impact over the year will be small, however, because "a fall in output and trade in one quarter will probably be followed by increased activity in subsequent quarters."

For this year, the developed countries are expected to post trade growth of 4.5 percent, while developing economies should gain 9.5 percent.

This follows the same trend in 2010, when growth of goods exports from the developed economies hit 12.9 percent while developing economies outpaced that with 16.7 percent.

China consolidated its place as the world's top merchandise exporter in 2010, exporting $1.58 trillion worth of goods after growth of 31 percent. It now accounts for 10.4 percent of global trade.

The Asian giant also moved to increase merchandise imports significantly, taking the number two spot with imports reaching $1.40 trillion in 2010, up 39 percent.

Nevertheless it still trails the United States, which remains the world's biggest goods importer at $1.97 trillion, up 23 percent.

The United States also unseated Germany to become the world's second biggest goods exporter, with $1.28 trillion, up 21 percent, while Germany exported $1.27 trillion, up 13 percent.

© 2011 AFP

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