Exports from developing countries to grow 11%

MANILA, Philippines - Exports from developing countries like the Philippines and the Commonwealth of Independent States are projected to expand 11 percent in 2010, but it would take another year of growth at this pace for trade volumes to surpass the peak level of 2008.

That of developed economies would only rise 7.5 percent while world trade is set to rebound in 2010 by growing 9.5 percent after the 12.2-percent drop last year.

But it would require three years of growth for developed countries to bring about a return to pre-crisis levels.

These growth estimates were made by the World Trade Organization (WTO) Secretariat published by the International Trade Center (ITC) in its April 2010 business trade policy briefing issue.

World trade and output are currently in a recovery phase, it noted. Without any further upheavals in the global economy, world merchandise trade should resume its normal upward trajectory through the end of 2010, although some deviation from its previous trend line will persist indefinitely.

These projections took into consideration a resumption of global gross domestic product (GDP) growth in line with consensus estimates of 2.9 percent at market exchange rates, as well as stability in oil prices and exchange rates.

Unexpectedly positive or negative economic news in the coming months could, however, necessitate a revision of the trade forecast, it said.

According to business briefing, these trade forecasts are more sensitive to changes in outcomes for developed countries than for developing ones due to the former’s larger share of world trade.

It said various factors could pose significant risks to the growth forecasts, including the possibility of further increases in oil prices, appreciation or depreciation of major currencies and additional adverse developments in financial markets.

However, there is a possibility that trade may grow higher than forecast like if unemployment falls more quickly than expected in developed countries, it added.  

In 2009, volume of world trade contracted 12.2 percent – the largest such decline since World War II – due to the impact of the global financial crisis.

Despite this, trade-restricting measures applied by WTO members in response to the crisis have actually declined in recent months.

However, significant slack remains in the global economy, and unemployment is likely to remain high throughout 2010 in many countries. Persistent unemployment may intensify protectionist pressures, the business briefing further said.