2’nd Consecutive Year of Slowdown Expected in World Trade

World trade growth slid to 5.5% last year from 8.5% in 2006 and may grow even more slowly in 2008 - at about 4.5% - as sharp economic deceleration in key developed countries is only partly offset by continuing strong growth in emerging economies, according to World Trade Organization economists.

WTO economists cautioned that their preliminary assessment of 2007 trade figures and forecasts for this year have been unusually difficult to gauge due to the uncertainty caused by sharp market fluctuations. The financial market turbulence, which has considerably reduced economic growth projections for some major developed markets, has clouded the prospects for world trade in 2008.

The present economic growth forecast for these markets is 1.1%. For developing countries, growth is forecast at above 5%. Together these could result in world output growth of 2.6% and a global trade expansion of about 4.5% in real terms that is, discounting inflation.

Source: World Trade Organization