Sep 21, 2012
WTO scales back 2012 trade-growth estimateBack
System|Asia|Europe|China|United States|Pascal Lamy
© Reuse this
The World Trade Organisation (WTO) has downgraded its 2012 forecast for world trade expansion from the 3.7% forecast in April to 2.5%, owing to prevailing economic headwinds and has also scaled back its 2013 estimate to 4.5%, from 5.6%.
“On the export side, we anticipate a 1.5% increase in developed economies’ trade (down from 2%) and a 3.5% expansion for developing countries (down from 5.6%). On the import side, we foresee nearly stagnant growth of 0.4% in developed economies (down sharply from 1.9%) and a more robust 5.4% increase in developing countries (down from 6.2%),” the organisation said in a statement.
Risks to the forecast would remain mostly on the downside as long as financial uncertainty in Europe remains elevated, the WTO said, while warning that any “hard landing” for the Chinese economy would add to the stresses. However, there was also some upside potential if the European Central Bank’s recently announced bond-purchasing programme has an immediate salutary effect on European Union (EU) import demand.
Director-general Pascal Lamy welcomed recently announced measures to reinforce the euro and boost growth in the US. But he said more needed to support growth, and again called for a renewed commitment from countries to revitalise the multilateral trading system. “The last thing the world economy needs right now is the threat of rising protectionism,” he warned.
The volume of world trade as measured by the average of exports and imports only managed to grow 0.3% in the second quarter compared to the first, or 1.2% at a yearly rate.
The trade slowdown in the first half of 2012 was driven by an even stronger deceleration in imports of developed countries and by a corresponding weakness in the exports of developing economies.
Although developed countries collectively recorded modest increases in both exports and imports in 2012, some grew faster than others.
Exports of the US and shipments from the EU to the rest of the world grew steadily over the past year, with year-on-year increases of around 7% and 5% respectively, in the second quarter.
Japanese exports had been mostly flat since mid-2010, but even they recorded an 8.5% year-on-year increase in the second quarter.
US and Japanese imports had also held up relatively well despite the crisis, with year-on-year growth of roughly 5% and 6% in the latest period.
However, import demand in the EU had weakened significantly, resulting in less trade between EU countries and fewer imports from the rest of the world (also down 3.5%). The weight of the EU in total world trade, combined with the larger-than-expected year-on-year drop in EU imports through the first half of 2012, explains much of the downward revision to the forecast.
The EU also represents nearly 60% of developed economies’ imports, which accounted for the stagnation in projected imports of developed economies in 2012.
Weak import demand in developed countries and softer domestic demand in China had contributed to sagging trade flows in the developing world, most noticeably in dynamic export-oriented economies in Asia.
Export growth dropped to 2.9% and import growth fell to 2.8% in the first quarter of 2012 before rebounding slightly in the second quarter, but available monthly data suggest that the third-quarter results may be weaker still.
Edited by: Terence Creamer© Reuse this Comment Guidelines
Other Economy News
Updated 1 hour 37 minutes ago The head of economics and trade at the Delegation of the European Union (EU) in Pretoria has acknowledged South Africa’s trade negotiators won important concessions in the long-running Economic Partnership Agreement (EPA) trade talks. But he says it was South...
Updated 1 hour 40 minutes ago The head of economics and trade at the Delegation of the European Union (EU) in Pretoria has acknowledged South Africa’s trade negotiators won important concessions in the long-running Economic Partnership Agreement (EPA) trade talks. But he says it was South...
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
This Week's Magazine
Multinational semiconductor chipmaker corporation Intel announced its national campaign to further acquire partners to drive its She Will Connect programme, an initiative that aims to expand digital literacy skills to young women in developing countries, further into...
South Africa's MeerKAT radio telescope array programme should get back on schedule within a few months. This assurance has been given by SKA South Africa (SKA SA) associate director: science and technology Prof Justin Jonas. Early last month, Science and Technology...
The Passenger Rail Agency of South Africa’s (PRASA’s) Metrorail service will remain a subsidised service following its current multibillion-rand rolling stock, station, depot and signalling upgrade programme. PRASA group CEO Lucky Montana has allayed fears that...
The uncertainties around the remediation of affected areas as addressed in the Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will possibly spark litigation and disputes between landowners and businesses, contractors...
South Africa is currently the largest component of the African Development Bank’s (AfDB’s) active portfolio in Southern Africa, comprising 62.5% of the bank’s $7.9-billion exposure to the 12-country region – the second largest beneficiary is Mauritius, which...