World merchandise trade jumps 5% in 2011 – WTO

The volume of world merchandise trade rose 5% in 2011, accompanied by global output growth of 2.4%, according to the 2012 World Trade Report released mid-July 2012.

This marked a significant slowdown from 2010, when trade advanced 13.8% and output expanded by 3.8%.

The report, published by the World Trade Organisation (WTO), indicated that multiple economic shocks held back economic activity and trade during the year 2011 based on an anticipated slower growth in both trade and output.

“The earthquake, tsunami and nuclear incident that hit Japan in March sharply depressed the country’s exports in the second quarter, while flooding in Thailand reduced the supply of key parts and components in the fourth quarter and further distorted global production networks,” it highlighted.

According to the WTO, the turmoil in North African countries took a toll on the region’s exports, especially in Libya, where oil production and exports plunged.

The report further explains that negative gross domestic product (GDP) growth in the European Union also reduced demand for imported goods in the fourth quarter as the euro sovereign debt crisis came to a head.

The report identified that the sluggish pace of economic growth in 2011 reduced import demand in the largest economies and resulted in global export growth below the WTO’s forecast of 5.8%.

Developed economies exceeded expectations with export growth of 4.7% in 2011 while developing economies did worse than expected, recording an increase of just 5.4%, said the WTO.

In fact, the report said, shipments from developing economies other than China grew at a slightly slower pace than exports from developed economies (including disaster-struck Japan).

By Ekow Quandzie