The World Trade Organization cut its forecast for worldwide trade this year, saying the outlook for the global economy is “increasingly uncertain.”
The WTO lowered its 2011 projection for growth in merchandise trade around the world in volume terms to 5.8 percent from the 6.5 percent predicted in April, the Geneva-based organization said in a statement today. Exports from developed economies are seen growing 3.6 percent this year, while shipments from developing countries are projected to increase 8.6 percent, it said.
“Trade has grown more slowly than expected in recent months,” the WTO said. “Since the original forecast for 2011 was issued on April 22, developed countries in particular have been buffeted by strong headwinds, including the lingering effects of the earthquake and tsunami in Japan, the prolonged budget impasse and credit downgrade in the U.S. and the ongoing euro-area sovereign-debt crisis.”
Group of 20 finance chiefs late yesterday promised to address rising risks to the global economy and pushed Europe to contain its debt crisis after concern the world is on the brink of another recession sent stocks tumbling. The worsening European debt turmoil and threat of a U.S. slump pushed the MSCI All-Country World Index of 45 nations into a bear market for the first time in more than two years.
The euro rallied from a decade low against the yen, paring its biggest weekly drop since May, as the G-20 nations pledged a “strong and coordinated” response to challenges facing the world’s economy. The euro also was higher against the dollar, trading at $1.3518 at 8:50 a.m. in London, up 0.4 percent on the day.