Fin24

WTO cuts global trade forecast

2012-09-21 11:47

Singapore - The World Trade Organisation (WTO) on Friday slashed its 2012 global trade forecast to 2.5% from 3.7%, citing the eurozone debt crisis as a key factor behind the downgrade.

The sputtering US economy and a slowdown in China were other factors dragging down global trade, the Geneva-based body said.

"The global economy has encountered increasingly strong headwinds since the last WTO Secretariat forecast was issued," the WTO said in a press statement released in Singapore.

"Output and employment data in the United States have continued to disappoint, while purchasing managers' indices and industrial production figures in China point to slower growth in the world's largest exporter.

"More importantly, the European sovereign debt crisis has not abated, making fiscal adjustment in the peripheral euro area economies more painful and stoking volatility."

In April the WTO had warned that world trade growth, which slowed in 2011 after a big rebound in 2010, would weaken again this year.

*Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.