After the sharpest decline in more than 70 years, world trade is set to rebound in 2010 by growing at 9.5 percent, the World Trade Organization said Friday.
WTO economists expect exports from developed economies to increase by 7.5 percent in volume terms over the course of the year while shipments from the rest of the world, including developing economies and the Commonwealth of Independent States, should rise by around 11 percent as the world emerges from recession.
The WTO said the strong expansion it expects will help recover some, but by no means all, of the ground lost in 2009 when the global economic crisis sparked a 12.2 percent contraction in the volume of global trade — the largest such decline since World War II.
If trade continues to expand at its current pace, the WTO economists predict it will take another year for trade volumes to surpass the peak level of 2008.
The WTO said measuring trade in volume terms provides a more reliable basis for annual comparisons since volume measurements are not distorted by changes in commodity prices or currency fluctuations, as they can be when trade is measured in dollars or other currencies.
The WTO noted that one positive development in 2009 was the absence of any major increase in trade barriers imposed by WTO members in response to the crisis. It said the number of trade-restricting measures applied by governments has actually declined in recent months.
“However, significant slack remains in the global economy, and unemployment is likely to remain high throughout 2010 in many countries. Persistent unemployment may intensify protectionist pressures,” the WTO said.
“We see the light at the end of the tunnel and trade promises to be an important part of the recovery. But we must avoid derailing any economic revival through protectionism,” said WTO Director-General Pascal Lamy.
The 12 percent drop in the volume of world trade in 2009 was larger than most economists had predicted. This contraction also exceeded the WTO’s earlier forecast of a 10 percent decline. World trade volumes fell on three other occasions after 1965 (by 0.2 percent in 2001, 2 percent in 1982, and 7 percent in 1975), but none of these episodes approached the magnitude of last year’s economic slide.
Trade in current U.S. dollar terms dropped even further than trade in volume terms (by 23 percent), thanks in large part to falling prices of oil and other primary commodities.
Contact Peter T. Leach at firstname.lastname@example.org.