Now if Nepali traders think that was the bad news, the World Trade Organization (WTO) has warned the 2012 will be still worse. [break]“The world trade will slow further still to 3.7 percent in 2012,” reads the statement, indicating that Nepali traders might face tough time to maintain export growth they had managed in 2011.
The report attributed the 2011 slowdown to global economy losing momentum due to a number of shocks, including the European sovereign debt crisis. And the outlook for 2012 has darkened mainly as the euro sovereign debt crisis continues to undermine global growth.
“The agreement on a debt restructuring plan for Greece provided some respite for governments, but the European Union (EU) is showing signs of recession, sparking negative consequences for global trade and output,” reads the report.
Emerging and developing countries, including Nepal will certainly be adversely affected by falling import demand in the European Union, which is one of their major export markets.
Nepal´s trade with the EU in 2011 stood at euro 164 million (Rs 17.72 billion), with exports totaling at euro 72 (about Rs 7.77 billion). The EU consumes a large chunk of Nepal´s hand knotted woolen carpet, pashmina, readymade garment and handicrafts. Clearly, any drop in demand will affect Nepal´s exports badly.
“More than three years have passed since the trade collapse of 2008/09, but the world economy and trade remain fragile. The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods,” the WTO statement quoted Director General Pascal Lamy as saying.
Referring to the sluggish pace of world trade recovery, he raised concern over ´steady trickle´ of restrictive trade measures as that could gradually undermine the benefits of trade openness. Given the situation, he urged the WTO members to turn their attention to revitalizing the trading system and to ensuring such restrictive trade measures do not materialize.
The WTR 2012 forecasts that merchandise trade in 2012 will grow by 3.7 percent. Of that, export of developed economies is anticipated to grow by 2 percent, while that of developing economies is estimated at 5.6 percent.
On the import side, the WTO has projected 1.9 percent growth for developed countries and 6.2 percent for developing economies.
Likewise, it expects world trade volume in 2013 to recover to 5.6 percent. “Exports of developed and developing economies should increase by 4.1 percent and 7.2 percent respectively during the year,” reads the report.
In 2013, the import of developed economies is projected to grow by 3.9 percent, while that of developing economies could advance by 7.8 percent. The WTO has clarified that projects suffers risk mainly from deeper recession in the Euro area, rising commodity prices, high oil prices, geo-political risks and unanticipated natural disasters.
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