| WTO – WORLD TRADE 2008, PROSPECTS FOR 2009 |
The collapse in global demand will drive exports down by roughly 9% in volume terms in 2009.
The WTO Secretariat published its initial annual report on World Trade, covering 2008 with a provisional outlook for 2009. Copy of the press release is attached. The more detailed report follows later in the year.
From the report:
- The collapse in global demand brought on by the biggest economic downturn in decades will drive exports down by roughly 9% in volume terms in 2009, the biggest such contraction since the Second World War, WTO economists forecast today.
- The depleted pool of funds available for trade finance has contributed to the significant decline in trade flows, in particular in developing countries
- Following the dramatic worsening of the financial crisis since September of last year, real global output growth slowed to 1.7%, compared to 3.5% in 2007, and is likely to fall by between 1% and 2% in 2009.
- This is the first decline in total world production since the 1930s, and its impact is magnified in trade.
- WTO economists warn that the extraordinary turbulence of world markets in recent months and the continued uncertainty about the near-term trajectory of the global economy makes gauging the preliminary 2008 trade estimates and 2009 projections unusually difficult.
- The WTO’s preliminary estimate of 2% growth in world trade volume for 2008 is substantially lower than the forecast of 4.5% growth issued a year ago.
- Weaker demand in developed economies brought about by falling asset prices and increased economic uncertainty helped pull world output growth down to 1.7%, from 3.5% a year earlier. Growth in 2008 was the slowest since 2001 and well below the 10 year average rate of 2.9%.
- Developed economies only managed a meagre 0.8% growth during last year, compared to 2.5% in 2007, and an average rate of 2.2% between 2000 and 2008. Developing economies, on the other hand, expanded their output in 2008 by 5.6%, down from 7.5% in 2007, but still equal to their average rate for the 2000—08 period.
- Oil exporting countries experienced rapid growth of 5.5% on average in 2008, with exports from the Middle East growing at an even faster rate of 6.3%.
- A notable aspect of the current slowdown in world trade is its synchronized nature. Monthly exports and imports of major developed and developing economies have been falling in unison since September 2008. With the growing share of developing countries’ trade in the global total, and increased geographical diversification of these flows, it was assumed by some commentators that a “decoupling” effect would have made developing countries less vulnerable to economic turmoil in developed countries. This has not turned out to be the case.
- Between June and November of 2008 the Baltic Dry Index fell by 94%.
- Annual trade figures in dollar terms were strongly influenced by changes in commodity prices and exchange rates in 2008. Despite the fact that fuel prices ended 2008 at a lower level than at any point in 2007, average prices for 2008 were about 40% higher than 2007, which tended to raise total merchandise imports for most countries. For example, United States merchandise imports grew 7% in 2008, but non-fuel imports only increased by 1%.
- Note the more detailed figures, the tables and charts included in the publication.
