The World Trade Organization (WTO) on Monday raised its forecasts for trade activity and now expects trade growth in 2010 to reach 13.5 percent, which would be a record annual increase and significantly higher compared to the initially forecasted 10 percent.
"Following a faster-than-expected recovery of global trade flows so far this year, WTO economists have revised their projections for global trade growth in 2010 upwards to 13.5 percent," the organization stated in a press release. Such forecasts indicate a strong recovery compared to 2009, when a sharp decline in trade of 12.2 percent was recorded, pressured by a drop in exports due to economic slowdown. This would more than compensate for the losses incurred during the crisis."This would be the fastest annual trade growth since trade data has been collected over the past 60 years," the WTO press release further stated."Such a surge in trade exchange would enable an exit from the painful economic recession and could ensure a quicker return to work for people," said WTO Director-General Pascal Lamy.
WTO economists now expect that the growth of merchandise exports from developed economies will rise by 11.5 percent, meaning it will nearly compensate for the strong decline of 15.3 percent in 2009. These growth forecasts are also significantly higher compared to the 7.5 percent estimated by economists in March. In the rest of the world, export growth is expected to reach 16.5 percent, which is a significant recovery after a decline of 7.8 percent in 2009. For comparison, in March, economists expected growth of 11 percent. The growth in trade volume was particularly pronounced in the first half of 2010, when both developed and developing countries were emerging from the most severe crisis since World War II. During this period, exports increased by 25 percent, driven by the growth of emerging economic giants, according to WTO data published on September 1. Chinese exports in the second quarter, according to the same data, surged by 41 percent, while Indian exports increased by a third. However, the WTO warns of a slowdown in production growth in the second half of the year due to the end of government stimulus programs introduced to encourage economic recovery, as well as due to the slowing down of the inventory replenishment process in companies. (H)
