Economic Slowdown: World trade to grow by mere 2.5%

SINGAPORE:

World trade will grow by a mere 2.5% this year, dragged down by the European crisis to less than half of the previous 20-year average, the World Trade Organisation (WTO) said on Friday.

The WTO cut its estimate from a 2012 growth forecast of 3.7% it made in April and also lowered its forecast for 2013 to 4.5% growth from 5.6%. “I see the risk more on the downside than the upside,” WTO Director General Pascal Lamy said at a news conference in Singapore. “What could be surprising is that you have a volume of trade that is lower than world (economic) growth.”

The WTO figures are based on world economic growth of 2.1% in 2012 and 2.4% in 2013, which it said was a consensus estimate of economic forecasts. “The main reason for the growth slowdown is of course Europe,” said Lamy, who will step down next year as head of the 157-member group that has so far failed to agree on major reforms of global trade rules. 

Published in The Express Tribune, September 23^rd, 2012.