World trade, a key motor of global growth, could stagnate this year under the impact of SARS, the Iraq war and economic and political uncertainty, the World Trade Organisation (WTO) said yesterday.
Top economists from the body based in Geneva, Switzerland, also said a cautious forecast in its annual spring report that trade might expand by 2.5-3 per cent could well be revised downwards.
"Considerable uncertainty clouds trade growth prospects for 2003," the report said. "The downside risks on predictions ... are large." WTO economists Mr Patrick Low and Mr Michael Finger said they had already been compelled to lower their original forecast for this year of 5 per cent growth in trade volume to follow a relatively poor 2.5 per cent increase last year.
But if the deadly SARS rebounds severely on the economy of trading giant China where it is believed to have originated, the impact would be felt around the globe, they said.
The WTO figures showed China had helped keep international trade buoyant in 2002 by increasing its own imports and exports by around 20 per cent, ousting Britain from fifth place among top world traders.
Mr Finger said initial indications were that it had kept up this momentum in the first two months of the year, when it was keeping the SARS outbreak firmly under wraps.
The report said the predicted world trade rise for this year - well below the average of 6.7 per cent throughout the 1990s and the 12 per cent record of 2000 - would depend on a pick-up in global production and consumer demand from April.
But in a comment with the report, WTO director-general Mr Supachai Panitchpakdi suggested this was far from certain in the present world political and economic climate.
The WTO report, written before the US- British invasion of Iraq last month which toppled President Saddam Hussein, suggested the decision by the two powers to go it alone could have serious repercussions on trade politics. - (Reuters)
