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The collapse in global demand brought on by the biggest economic downturn in decades will drive exports down by roughly 9% in volume terms in 2009, the biggest such contraction since the Second World War. The contraction in developed countries will be particularly severe with exports falling 10% this year. In developing countries, which are far more dependant on trade for growth, exports will shrink by some 2%-3% in 2009.
GROWTH PROSPECTS FOR 2009 BY WTO
The WTO forecasts a less optimistic economic scenario for 2009, with weaker trade and economic expansion expected for the year.
Overall exports in volume terms is expected to decline by 9% in 2009 (2008: 2% growth) with developed and developing economies registering declines of 10% and 2% - 3%
respectively. This is the first decline in total world production since the 1930s.
This is due mainly to:
• decline in demand in all regions especially in developed economies due to slowdown in world economy;
• globalisation pattern of supply chains in goods, which results in greater connectivity of trade flows between producing and consuming countries that will further aggravate decline in total trade;
• shortage of trade finance and credit as a result of the financial crisis which started almost two years ago in the US; and
• protectionist measures imposed by economies to protect their domestic industries.
The global output growth is expected to register 1% - 2% in 2009 compared to 1.7% in 2008 and 3.5% in 2007.
(Press Release on 23 March 2009)
