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Global trade to decline by 9%

Posted on: March 26, 2009


Bernama – Thursday, March 26

KUALA LUMPUR, March 25 (Bernama) — The collapse in global demand brought on by the biggest economic downturn in decades will drive exports down by roughly nine percent in volume terms this year, World Trade Organisation (WTO) economists forecast.

This would be the biggest such contraction since the Second World War, they said in a report on the prospects for 2009 released in Geneva Wednesday.

In response, WTO director-general Pascal Lamy, said: “Trade can be a potent tool in lifting the world from these economic doldrums.”

In London, the Group of 20 leaders would have a unique opportunity to unite in moving from pledges to action and refrain from any further protectionist measure which will render global recovery efforts less effective,” he said in a statement.

The contraction in developed countries would be particularly severe with exports falling by 10 percent this year.

In developing countries, which are far more dependent on trade for growth, exports will shrink by some two to three percent in 2009, the economists said.

Economic contraction in most of the industrial world and steep export declines already posted in the early months of this year by most major economies – particularly those in Asia – makes for an unusually bleak 2009 trade assessment, said the WTO in its annual assessment of global trade.

Signs of the sharp deterioration in trade were evident in the latter part of 2008 as demand sagged and production slowed.

Although world trade grew by two percent in volume terms for the whole of 2008 it tapered off in the last six months and was well down on the six percent volume increase posted in 2007, they said.

Lamy said that governments should avoid making this bad situation worse by reverting to protectionist measures which in reality protect no nation and threaten the loss of more jobs. — BERNAMA

MR THS

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