World trade to grow 9.5%

Mar 26, 2010

'This means that trade-wise, there is light at the end of the tunnel and it's certainly a good forecast, good news for the world economy,' head of the World Trade Organisation Pascal Lamy said. -- PHOTO: REUTERS

GENEVA - WORLD trade is expected to grow 9.5 percent in 2010, after suffering its biggest collapse since World War II in 2009, the head of the World Trade Organisation Pascal Lamy said on Friday.
'Our economists are forecasting a world trade growth for 2010 of 9.5 per cent with developing countries' trade growing 11 per cent and industrialised countries' trade growing by 7.5 per cent,' the WTO director-general said.

'This means that trade-wise, there is light at the end of the tunnel and it's certainly a good forecast, good news for the world economy,' he added. World trade plunged 12 per cent in 2009 due to a 'sharp contraction in global demand' during the economic crisis.

Amid last year's slump, China overtook Germany to become the world's top exporter with some US$1.20 trillion (S$1.68 trillion) worth of merchandise exported in 2009, according to WTO data. Germany exported US$1.12 trillion of merchandise, while the world's biggest importer, the United States, was in third place with US$1.06 trillion worth of exports last year.

The WTO noted that the trade slump last year was particularly magnified by the 'product composition of the fall in demand, by the presence of global supply chains, and by the fact that the decline in trade was synchronized across countries and regions.'

Underlining the scale of the downturn, Patrick Low, chief economist at the WTO, said that the projected growth of 9.5 per cent this year would need to be repeated in 2011 in order for the global economy to recover to peak trade levels reached in 2008 before the crisis struck. The economist warned that the 2010 forecast could yet prove over-optimistic if currency and commodity prices were to show wild swings, or if the financial markets were to show other adverse developments. -- AFP