World trade growth in 2013 and 2014 is likely to be slower than the growth previously forecast. World Trade Organisation (WTO) economists currently predict a 2.5% growth for 2013, down from the 3.3% forecast in April, and a 4.5% growth for 2014, down from 5%, but they say conditions for improved trade are gradually improving.

The demand for imports in developing economies is reviving, but at a rate that is slower than expected. This hindered the growth of exports from developed and developing countries in the first half of 2013 and was the reason for the lower forecasts, economists say.

WTO director-general Roberto Azevêdo says the last two years of sluggish trade growth reinforces the need to make progress in the multilateral negotiations.

“Although the trade slowdown was mostly caused by adverse macroeconomic shocks, there are strong indications that protectionism, which is taking new forms that are more difficult to detect, has also played a part ,” he explains, adding that negotiations, which will address these problems to facilitate greater trade and opportunities to spur economic growth, are under way in Geneva.

Some short-term prospects are improving, with encouraging data coming from Europe, the US, Japan and China. Reports on private-sector activities from purchasing managers’ indices, which give some indication about future activity, shipping rates, automobile pro- duction and other leading indicators, suggest that the economic slowdown has bottomed out and that a tentative recovery is under way. This is expected to reflect in rising quarterly growth in the months ahead, WTO economists say.

Although large developing economies have slowed appreciably in recent months, the latest figures from China on industrial production suggest that the country may be regaining some of its dynamism. However, India’s economy is still in the midst of a sharp contraction accord-ing to composite leading indicators calculated by the Organisation for Economic Cooperation and Development.

Further, since the European Union (EU) consumes about one-third of the world’s traded goods and the EU unemployment rate is likely to remain at the current rate, growth in trade can be expected to be below average, which is below the 20-year average of 5.4%.

The volume of world merchandise trade was up only 1.2% in the first half of 2013, compared with the same period in 2012. For the forecast of 2.5% growth in world trade to be realised, a 3.8% year-on-year increase in the second half of 2013 will be required.

Some of the demand to fuel this growth would undoubtedly come from increased imports in developed economies. These imports dropped 1.6% in the first half of 2013 and will require a 1.4% rise in the second half to achieve 0% growth for the year. Whether this happens will depend mostly on the pace of recovery in the EU, according to WTO economists.

The fact that imports of developing eco-nomies have increased about 12% in the last two years, while those of developed economies have been flat or declining, suggests that developing economies have partly cushioned the drop in developed-economy imports.

The WTO expects a 1.5% increase in world-wide exports and forecasts a stagnant growth of 0.1% for developed countries and a more robust 5.8% for developing economies.

In 2014, exports of developed economies is expected to rise by 2.8% and those of devel-oping countries by 6.3%. Imports of developed economies are projected to increase by 3.2% in 2014 and those of developing economies by 6.2%.

The weakness of developed economy imports in 2012 and 2013 can mostly be attributed to the prolonged recession in the euro area, which began in the fourth quarter of 2011 and stretched into the first quarter of this year.