JOIN US World trade will grow by a mere 2.5 per cent this year, dragged down by Europe 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 per cent it made in April and also lowered its forecast for 2013 to 4.5 per cent growth from 5.6 per cent.
“I see the risk more on the downside than the upside,” WTO Director General Pascal Lamy said. “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 per cent in 2012 and 2.4 per cent 2013, which it said was a consensus estimate of economic forecasts.
“The main reason for the growth slowdown is of course Europe,” said Lamy. The WTO now expects 1.5 per cent growth in exports from developed economies this year, instead of the previous forecast of 2 per cent. Those from developing countries are seen posting 3.5 per cent growth, down from 5.6 per cent previously.
It sees developed nations more than doubling their export growth to 3.3 per cent next year and developing countries exporting 5.7 per cent more.
The WTO said that its 2013 estimates assumed current policy measures would be enough to avoid a breakup of the euro and that agreement would be reached to stabilise public finances in the United States, avoid automatic spending cuts and tax increases.