World trade to slow down to 3.7 % in 2012

The World Trade Organisation (WTO) has projected a further slowdown in world trade, pegging the growth at 3.7 per cent for 2012. World trade expanded in 2011 by 5 per cent, a sharp deceleration from the 2010 rebound of 13.8 per cent. It attributed the slowdown to the global economy losing momentum due to a number of shocks, including the European sovereign debt crisis. Multiple economic setbacks during 2011 dampened growth beyond expectations and led to a stronger than anticipated easing in the fourth quarter, according a report released by the WTO. “More than three years have passed since the trade collapse of 2008-09, but the world economy and trade remain fragile. The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods,” WTO Director-General Pascal Lamy said. “The WTO has so far deterred economic nationalism, but the sluggish pace of recovery raises concerns that a steady trickle of restrictive trade measures could gradually undermine the benefits of trade openness. It is time to do no harm. WTO members should turn their attention on revitalising the trading system,” he further said. The preliminary figure of 5 per cent for world merchandise trade growth in 2011 is down 0.8 points from its most recent forecast in September 2011. It said India recorded exports growth of 16 per cent in 2011, the fastest in the world in volume terms last year. “India had the fastest export growth among major traders in 2011, with shipments rising 16.1 per cent. China had the second-fastest export growth of many major economies at 9.3 per cent,” the report said. India also emerged as the second-fastest importer after China growing at 6 per cent in 2011. While, Indian exports increased the fastest in the world in volume terms, in terms of dollar realisation, the growth has been slowing sharply since August 2011, according to Commerce Ministry data. WTO economists said the weak import demand from the Europe and the U.S. would adversely affect the emerging and developing countries such as India. The U.S. and the European Union together account for nearly 35 per cent of India's exports of $245.9 billion in 2010-11, as per India's trade data. Keywords: World Trade Organisation