Saturday, November 8, 2008

WTO revises up 2007 trade growth, silent on 2008

Reuters,06/11/2008

The World Trade Organisation (WTO) revised upwards its estimate of 2007 growth in world exports on Wednesday but kept silent in its latest trade survey about developments this year and gave no forecast for 2009 either.

Trade experts said international trade is falling at present as recession looms, making any predictions highly unreliable.

Growth in world merchandise exports in 2007 slowed to 6% in volume terms from 8,5% in 2006, but was still above the estimate made in April of 5,5%, the WTO said in its International Trade Statistics 2008.

"Weakening demand in developed countries, realignments in exchange rates and fluctuations in the prices for commodities, such as oil and gas, introduced uncertainties into the global markets in 2007," the WTO said in a statement.

In April the WTO forecast that growth in exports of merchandise goods such as cars, clothing and machinery, would slow further to a six-year low of 4,5% this year, an estimate that it held to in July.

But that forecast assumed that export growth would flatten or even recover in the fourth quarter of this year, and it is already clear that, at least on a quarter-on-quarter basis, trade is now actually falling, trade experts said.

As a result trade growth this year is likely to be only 4 percent or less, they said.

EXPORT VALUE ROSE

Last year's growth in exports, which was 15% in value terms, took total world merchandise exports to $13,62-trillion, the WTO said.

Within merchandise goods, trade in agricultural products grew by 4,5% by volume or 19,5% in dollar terms in 2007 to $1,13-trillion, spurred by a 14% rise in prices.

The WTO figures show that Germany remained the biggest exporter of merchandise goods in 2007, growing 20 percent in value terms to $1,33-trillion or 9,5% of the total.

China was close behind, rising 26% by value to $1,22-trillion, followed by the United States, which grew 12 percent by value to $1,16-trillion.

The recent recovery of the dollar against the euro has led to speculation that China could overtake Germany as the world's biggest exporter.

But as of August, Germany was still in top place, having enjoyed bigger export growth than China in the first half of this year, trade experts said.

Germany is suffering from slowing demand within the European Union, and a sharp slowdown in its key east European markets, as well as reduced demand for cars.

But China must now contend with weak consumer demand in the United States as the crucial Christmas holiday season nears.

Outside merchandise goods, trade in commercial services, such as transport, banking and telecoms, rose 18 percent in value terms in 2007 to $3,29-trillion.

The United States was the biggest supplier of commercial services, with 13,9% of the total, followed by Britain with 8,3%.

The WTO said that services generate about two thirds of world value-added, but their share in world trade is less than 19%.