Global trade seen picking up this year

MANILA, Philippines - Global trade is projected to slowly pick up pace in 2012 expanding at a subdued 5.2 percent, depending on developments in developing countries including the Philippines.

The World Bank, in its latest Global Economic Prospects (GEP) report, said global trade would rise to seven percent next year and 7.7 percent in 2014, already above the historical average of 6.8 percent.

“GDP (gross domestic product) growth in developing countries is projected at more than twice that of developed countries. Hence, developing country trade is expected to continue to serve as the most dynamic engine of global trade growth over the forecast horizon,” it noted.

The report said developing countries are contributing some 50 percent of the increase in global trade since 2009. Thus, global trade outcomes would also be dependent on developments in developing countries.

It likewise attributed the subdued increase in global trade to the expected return to modest growth in the European Union in the second half of 2012, and the strengthening recoveries in the United States and Japan.

Global trade dropped at 9.5 percent in the fourth quarter of 2011 due to among other things rapidly falling European import demand and heightened global uncertainty.

However, it was able to expand at above 14.4 percent in January to March this year, boosted by the strengthening domestic demand in the US, a relaxation of monetary policy in large middle-income countries and easing of financial market tensions.

Countries continued expanding throughout the latter months of 2011 and the initial months of 2012, though also impacted by the events in the latter part of last year.

“This development continued the post-crisis trend where import demand from developing countries has been the most dynamic segment of global trade,” the World Bank pointed out. – Philexport News and Features