World trade will grow by a mere 2.5% this year, dragged down by Europe to less than half of the previous 20-year average, the World Trade Organisation (WTO) said on Friday.
The WTO cut its estimate from a 2012 growth forecast of 3.7% it made in April and also lowered its forecast for 2013 to 4.5% growth from 5.6%."I see the risk more on the downside than the upside," said Pascal Lamy, director-general, WTO. "What could be surprising is that you have a volume of trade that is lower than world (economic) growth."
The WTO figures are based on world economic growth of 2.1% in 2012 and 2.4% 2013, which it said was a consensus estimate of economic forecasts.
“The main reason for the growth slowdown is of course Europe,” said Lamy, who will step down next year as head of the 157-member group that has so far failed to agree on major reforms of global trade rules. “We also know US growth is lower than expected, (and) Japan is not in great shape.”
The WTO said its 2013 estimates assumed current policy measures would be enough to avoid a breakup of the euro.