Global Trade Set To Slightly Pick Up In 2002

By Agence France-Presse Growth in global trade looks set to pick up slightly in 2002 but "sober prospects" for the information technology sector will prevent a strong rebound, trade figures released May 2 by the World Trade Organization (WTO) showed. The WTO predicted in its latest report an average of 1% growth this year, with the recovery kicking off in the first quarter driven by the replenishing of stocks. "World merchandise trade is expected to expand only marginally on a year-to-year basis despite a projected increase of 6% between the fourth quarter of 2001 and that of 2002," it said. In the United States, the slowdown in demand had ended by the end of March and may have started to pick up again in recent months. An improving business climate in western Europe should prompt a gradual recovery of investment and more vigorous consumption during the year, the report added. While growth prospects for Japan are "bleak", a number of other Asian countries, including South Korea, report stronger consumer and investment expenditure, it noted. "Global economic activity is expected to pick up in the first half also due to the rebuilding of depleted inventories and is expected to gain more momentum in the second half of the year," the report said. "A strong rebound in trade is not the most likely outcome given the moderate output gains in major markets and today's more sober prospects for the IT industries," it noted. World exports fell by 1% in volume terms in 2001, and by 4% in value to $6 trillion (6.67 trillion euros) -- the biggest annual decrease since 1982 -- in sharp contrast to the previous year when trade and output expanded at record rates. The bursting of IT bubble was one of the major factors, but sluggish demand in western Europe and to a much lesser extent, the terrorist attacks on Sept. 11, also played a part. Countries that trade intensively in IT products -- East Asia and the U.S. -- saw the strongest decline in exports in 2001. For some of the Asian countries it was their weakest output for the last 30 years. Developing countries' share in world merchandise exports fell slightly from its peak level of nearly 30% in 2001, while their merchandise exports decreased by 6%. China, despite weak export markets, still recorded "outstandingly high" growth in imports and exports. The country, which joined the Geneva-based global trade body in December, has seen a steady rise in its share in world trade. The dollar value of its merchandise exports and imports in 2001 exceeded those of the Middle East, Africa or Latin America, excluding Mexico. But the most dynamic traders in 2001 were the transition economies, supported by nearly 5% economic growth, an increase in foreign direct investment and higher earnings from fuel exports. Copyright Agence France-Presse, 2002

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