Global merchandise trade: Kingdom in key position

25/04/2012 04:02 AST

Saudi Arabia ranked 10 globally in merchandise trade at the value of $365 billion in 2011 and captured 2.5 percent of total world market compared to 2010 figures, according to the World Trade Organization (WTO) data.

The UAE came in the 2nd and 14th ranks at Arab and international levels, respectively, valued at $285 billion followed by Kuwait at 3rd and 25th ranks at $ 98 billion, the report said.

According to WTO economists, world trade growth is predicted to slow to 3.7 percent in 2012. They attribute the slowdown to the global economy losing momentum due to a number of problems, including the European sovereign debt crisis.

Based on the WTO data, world trade volume for 2013 is expected to recover to 5.6 percent. Exports of developed and developing economies should increase by 4.1 percent and 7.2 percent, respectively. On the import side, developed economies should record growth of 3.9 percent while developing economies should advance 7.8 percent.

The report said world trade expanded in 2011 by 5.0 percent, a sharp deceleration from the 2010 rebound of 13.8 percent, and growth will slow further still to 3.7 percent in 2012.

A significant braking of trade expansion had been forecast for 2011, but multiple economic setbacks during the year dampened growth beyond expectations and led to a stronger than anticipated easing in the fourth quarter, the report said.

“More than three years have passed since the trade collapse of 2008-09, but the world economy and trade remain fragile. The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods,” WTO Director General Pascal Lamy was quoted as saying.

WTO economists cautioned that preliminary trade figures for 2011 and forecasts for 2012 were difficult to gauge due to the extraordinary levels of volatility in financial markets and in the broader economy for the last few years, the report said.

The present trade forecast assumes global output growth of 2.1 percent in 2012 at market exchange rates, down from 2.4 percent in 2011, based on a consensus of economic forecasters. However, there are severe downside risks for growth that could have even greater negative consequences for trade if they came to pass. These include a steeper than expected downturn in Europe, financial contagion related to the sovereign debt crisis, rapidly rising oil prices, and geopolitical risks.

Arab News