World trade growth slid to 5.5 per cent last year from 8.5 per cent in 2006 and may grow even more slowly in 2008 — at about 4.5 per cent — 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 per cent. For developing countries, growth is forecast at above 5 per cent. Together these could result in world output growth of 2.6 per cent and a global trade expansion of about 4.5 per cent in real terms, that is, discounting inflation.
“These are uncertain and troubling times for the global economy,” said Director-General Pascal Lamy. “To date, the financial market turmoil, significant price surges and the slow-down of developed economies have not led to a disruption of trade. But protectionist pressures are building as policymakers seek answers to the problems that confront us. More than ever we must reinforce our global trading system with rules that are more transparent, predictable and equitable.
“A reinforced trading system is an essential anchor for economic stability and development. Clearly, the best way to achieve this is to conclude the Doha Development round. The time for posturing and delay has ended. What we need now is action,” he said.