World trade growth slowdown

Economic Indicators Apr 12, 2012 No Comments

WTOThe international trade growth will decelerate in 2012 for the second consecutive year and will be reduced to a rate of 3.7%, but serious risks could lower it even more, below its average rate of 5, 4% over the last 20 years, said Thursday the World Trade Organization (WTO).

A recovery could intervene, however, next year, with a volume growth that would reach 5.6%. These projections assume a growth of world output by 2.1% in 2012.

Already, the WTO warned that there are significant risks to growth, which would not be without consequences on trade.”More than three years have passed since the collapse of trade in 2008-2009, but the global economy and trade remain soft. Continued trade slowdown expected in 2012 shows that the downside risks remain high. We are not out of the woods”, said the Director General of WTO, Pascal Lamy. The WTO economists believe that the situation remains “fragile and uncertain, with an increased risk of deterioration.”

In 2011, trade has slowed under the impact of several shocks: the sovereign debt crisis in Europe, the Japanese tsunami and floods in Thailand. Moreover, the Arab Spring uprisings have also affected exports of services from Africa due to sharp declines in Egypt and Tunisia. By region, the results of the developed economies have exceeded expectations, with growth of 4.7% in 2011, while those of developing economies were worse than expected, with growth of 5.4%, according to the WTOThe WTO expected a sharp slowdown in the expansion of trade in 2011, after a rebound of 13.8% in 2010.

But because of the many economic setbacks which occurred during the year, growth was even worse, leading to a sharper slowdown than expected in the fourth quarter. Thus according to WTO statistics, the growth of trade in manufactured goods was slower in the fourth quarter and the electronics trade shrank. This slowdown in world trade is expected to continue in 2012, with growth of 3.7%, lower than the average of 5.4% over the past 20 years. If these predictions come true, the volume of world trade will remain below pre-crisis levelThe Geneva-based organization warns that the EU is also perhaps already in recession, while growth of global production declines.

More information at Trade growth to slow in 2012 after strong deceleration in 2011.

Pascal Blanc

Pascal has implemented numerous software solutions in the areas of procurement, sourcing, spend management, supplier evaluation and performance. His clients include Fortune 500 companies in Europe, Asia and North America. He is a co-founder of Source & Procure.

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