[250912.EN.BIZ] WTO Cuts Global Trade Forecast, Sees 2.5pc Growth in 2012 - 4.5pc In 2013

THE World Trade Organisation (WTO) sees trade growth as 32 per cent less in 2012 and off by 19.6 per cent in 2013 than they did in its April forecast, and now expects trade to grow 2.5 per cent in 2012 and 4.5 per cent in 2013.

Slowing US job growth and shrinking Chinese expansion prompted the downgrade together with the continuing European sovereign debt crisis, resulting in a decline in trade with EU, said the WTO statement.

WTO director general Pascal Lamy said US financial assistance, aka "quantitative easing", to stabilise the euro was helped, but more needs to be done. "The last thing the world economy needs right now is the threat of rising protectionism," he said.

"All of these factors have contributed to an easing of global trade growth, which slowed to a crawl in the second quarter according to new quarterly merchandise trade volume statistics compiled by the WTO," said the WTO statement.

The WTO based its current forecast on the assumption that the EU will hold off a break-up of euro zone membership and the United States will avoid a US$120 billion cutback to reduce the federal deficit.

Source : HKSG.