World economy faces slowdown owing to increased uncertainty
Thursday, 12 April 2007, 07:00 Hrs
Geneva: The world economy risked slowing down this year, after a robust performance in 2006, the World Trade Organization, WTO, forecast. In its report for 2006 and look ahead to 2007, the Geneva-based WTO said risks in financial and property markets and large trade imbalances in goods and services meant increased uncertainty for the coming year. Growth in merchandise trade could slow to around 6 percent this year compared with 8 percent in 2006 which was however the second highest since 2000. Growth in gross domestic product had been stronger than expected in Europe and Japan in 2006, while the Chinese and Indian economies had experienced outstandingly high growth. The least developed countries saw trade expand by about 30 percent to reach record levels, buoyed by high prices for petroleum and other primary commodities. Fear among smaller suppliers of a setback in textiles and clothing in the face of fierce Chinese competition, failed to materialize. WTO Director-General Pascal Lamy said the strong performance in 2006 was welcome but needed to be consolidated by further world economic reform. As six of the key world trading nations; the U.S., EU, India, Australia, Japan and Brazil gathered in Delhi this week to try to push ahead with the Doha Round of negotiations, aimed at liberalizing global trade, Lamy again urged progress. "A successful conclusion to the Doha Round holds great potential for boosting growth and alleviating poverty," he said. "An agreement would also deliver more relevant trade rules, helping to establish a more stable and certain foundation for today's dynamic and global marketplace."