WORLD: Trade forecasts cut but recovery seen
Forecasts for world trade growth in 2013 and 2014 have been pared back as demand for imports into the EU and US is reviving at a slower rate than had earlier been expected.
Economists at the World Trade Organization (WTO) now predict growth of 2.5% in 2013, down from 3.3% forecast in April - and on a par with the 2.3% rate seen in 2012.
For 2014, they have revised their forecasts down to 4.5%, from the 5.0% that had earlier been expected, even though this is still below the average rate of 5.4% for the 20 years from 1982 to 2012.
In the first half of this year so far, a 2% drop in imports into the EU from the rest of the world, coupled with stagnation in the US, has weigh on exports from their trading partners.
However, this has partly been cushioned by a 5% surge in imports into developing economies and the Commonwealth of Independent States (CIS) in the year to date.
The WTO believes "conditions for improved trade are gradually falling into place," and that a gradual recovery could emerge in the coming months.
Whether an uptick materialises in the second half will depend mostly on the pace of recovery from the recession in the EU. But the most conspicuous downside risk is the phasing out of unconventional monetary policy in the US, the WTO notes.
"The past two years of sluggish trade growth reinforce the need to make progress in the multilateral negotiations," believes WTO director general Roberto Azevêdo.
"Although the trade slowdown was mostly caused by adverse macro-economic shocks, there are strong indications that protectionism has also played a part and is now taking new forms which are harder to detect.
"Negotiations under way in Geneva can address these problems, facilitating greater trade and opportunities to spur economic growth.
"But much hard work remains in the coming weeks if we are to deliver a successful outcome at the ministerial conference in Bali."
Earlier this month the United Nations Industrial Development Organization (UNIDO) forecast that global manufacturing output will grow by 2.7% in 2013 as recovery begins in Europe and higher demand is seen across industrialised nations.
It also noted that global apparel and textile production has continued its year-on-year growth into the second quarter.
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