World trade slows sharply amid international uncertainties
Growth in world merchandise trade is expected to slow in volume terms to only 2% in 2001 — compared with 12% in 2000. Even this growth is not assured given the present great uncertainties about economic and trade developments, according to the International Trade Statistics 2001 report, published by the World Trade Organisation last week.
Trade in Western Europe and the transition economies is expected to increase somewhat more than 2%, while that of North America is likely to be below the global average. Japan is certain to experience a contraction in exports, coupled with a moderate growth in imports.
These projections are based on preliminary figures for the first half of 2001 which suggest that the deceleration of trade growth this year will be much sharper than previously expected (early in 2001, trade was expected to grow by about 7% this year). An important factor behind the sharper-than-expected slowdown in world economic growth is the steep fall in expenditure on information technology products. Other factors include the unexpectedly strong slowdown in demand growth in Western Europe and the stagnation of merchandise imports into the United States.
Growth in the value of North America's trade decelerated throughout the first six months of 2001, and in the second quarter both exports and imports were below their year-earlier levels. Western Europe's merchandise exports and imports values are estimated to have increased by only 2.5% and 1.5%, respectively (measured in euros, the increases are 9.5% and 8.5%, respectively). For the world as a whole, the value of merchandise trade was up only 1% in the first half, compared with a 12.5% gain for 2000 as a whole.
