| A family waits at a railway station in Beijing on Wednesday. (Reuters)
Geneva, April 23 (Reuters): World trade, a key motor of global growth, looks set to stagnate this year under the impact of SARS, the Iraq war and economic and political uncertainty, the World Trade Organisation (WTO) said today.
Top economists from the Geneva-based body also told a news conference that a cautious forecast in its annual spring report that trade might expand by between 2.5 to 3 per cent could well be revised downwards in the coming weeks.
“Considerable uncertainty clouds trade growth prospects for 2003,” the report said. “The downside risks on predictions are large.”
WTO economists Patrick Low and Michael Finger said that 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 — or Severe Acute Respiratory Syndrome — 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 immediate effect would be in east Asia, because of the large amount of inter-regional trade, but the economic consequences would spread to other areas without a doubt. Everything is so interlinked,” said Finger.
In Singapore, analysts at leading international banks said the rampant Chinese economy may already be stalling.
And in Tokyo, government figures released today showed Japanese exports slowing to a crawl amid fears over the effects of SARS — which has now killed some 250 people worldwide, nearly half of them in Hong Kong.
The effects on China — a major attraction for international business since it joined the WTO at the end of 2001 — were likely to be sharpened by a warning against travel to Beijing issued today by the World Health Organisation (WHO).
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.