PRESS RELEASE 
 
PRESS/641 
23 September 2011 
 
(11-4585) 
TRADE FORECAST UPDATE 
WTO scales back its trade foreca st to 5.8% as downside risks 
build 
WTO economists announced today that they are revising their 2011 trade forecast to 5.8%, down 
from their earlier conservative estimate of 6.5%, since trade has grown more slowly than expected 
in recent months and the outlook for the global economy is increasingly uncertain. 
 Since the original forecast for 2011 was issued on April 22, developed economies in particular have 
been buffeted by strong headwinds, including the lingering effects of the earthquake and tsunami 
in Japan, the prolonged budget impasse and credit downgrade in the United States, and the ongoing euro area sovereign debt crisis.  Disappointing output and employment data have 
damaged business and consumer confidence and contributed to the recent turmoil in financial 
markets.  
In light of the deteriorating economy, the WTO now expects world merchandise exports to increase 
by 5.8% in volume terms in 2011, supported by real GDP growth of 2.5%.  Developed economies exports are expected to rise by 3.7% and their ou tput to go up by 1.5%.  Meanwhile, shipments 
from developing economies are estimated to increase by 8.5% and GDP by 5.9% (Table 1).  
 
Table 1: World merchandise  trade volume and GDP, 2008‐2011a 
Annual % change 
   2008 2009 2010 2011a 
Volume of world exports 
World  2.3 ‐ 12.1  14.1  5.8 
Developed  economies   0.9 ‐ 15.2  12.9  3.7 
Developing  economies  and CIS  4.6 ‐ 7.5  16.1  8.5 
Real GDP at market exchange  rates 
World  1.3 ‐ 2.6  3.7  2.5 
Developed  economies   0.1 ‐ 4.0  2.7  1.5 
Developing  economies  and CIS  5.6  2.1  7.1  5.9 
              
a  Figures for 2011 are projections.  
Source: WTO Secretariat  for exports, consensus  estimates  for GDP. 
 
During the economic crisis of 2008-09, WTO memb ers were for the most part able to resist 
protectionist pressures, but their collective will has recently been tested by weaker economic PRESS/641 
Page 2 of 4 
 
 
  growth, high unemployment and forced austerity.  Another downturn in the global economy could 
strain their resolve to the breaking point and trigger a descent into self-destructive protectionism.   
 "The multilateral trading system has been instrumental in maintaining trade openness during the 
crisis, thereby avoiding even worse outcomes. Members must remain vigilant. This is not the time 
for go-it-alone measures. This is the time to strengthen and preserve the global trading system so that it keeps performing this vital function in the future." Director General Pascal Lamy said. 
 
There is an unusually high degree of uncertainty associated with this forecast, which implies a slowdown in world trade rather than an outright decline.  Downside risks to GDP have certainly 
intensified in the last few months, and where output goes trade tends to follow.  The situation in 
Greece is injecting considerable uncertainty into the economic environment.  The economy may be at an inflection point where growth could pick up if policy makers devise a solution to the debt 
crisis that restores confidence in the financial system.  On the other hand, policy missteps could 
trigger wider instability along the lines of the crisis that followed the failure of Lehman Brothers in 2008.  Weighing these factors, we believe that risks to the forecast are firmly rooted on the down 
side, but we should not ignore the fact that there is some upside potential. 
 The original forecast from the April press release was quite cautious about the prospects for trade 
in 2011.  As a result, the size of this revision is relatively small.  The trade impact of the Japanese 
disaster turned out to be less than we expected, but the drag imposed by turbulent financial markets could end up being larger than anticipated, which leaves the original forecast not too far 
from the mark. 
 The revised forecast for merchandise exports is consistent with the WTO Secretariat's time-series 
model for quarterly import demand in a range of  major economies (specifically, the members of 
the Organisation for Economic Cooperation and Development, or OECD, plus China).
1  
 
Chart 1 shows recent monthly merchandise trade developments for selected economies in current 
US dollar terms, taken from the WTO's short-term trade statistics2.  Exports have levelled off 
recently in many developed economies or, in th e case of Germany and France, turned ominously 
downward.  Year-on-year growth in German expo rts fell from 36% in May to 20% in June, and 
finally to 16% in July.  During the same period French export growth dropped from 44% to 14% to 
9%.  On the other hand, trade flows of developi ng economies have mostly remained strong, and 
year-on-year growth rates for China's trade flows have actually accelerated through August, which 
should partly cancel any slowdown in developed economies trade.  For the moment it appears that the trade slowdown is mostly confined to developed economies, especially in Europe.  This 
suggests that solving the sovereign debt crisis may be the best way to avoid a more serious trade 
slump. 
                                               
1 Keck, Alexander, Raubold, Alexander and Truppi a, Alessandro (2009) "Forecasting international 
trade: A time series approa ch", OECD Journal: Journal of Business Cycle Measurement and Analysis, vol. 2: 
157-176.  The model has been extended and further improv ed since publication and also includes estimations 
for emerging economies, such as China. 
2  Additional quarterly and monthly data ca n be downloaded from the WTO's website at 
http://www.wto.org/english/res_e/statis_e/quarterly_world_exp_e.htm  PRESS/641 
 Page 3 of 4 
 
 
  Chart 1
Monthly merchandise exports and imports of selected economies, January 2007-August 2011 
(Billion dollars)
Sources: IMF International Financial Statistics, Global Trade Information Services GTA database, national statistics.China Rep. KoreaUnited States Japan
European Union extra France
Germany United Kingdom050100150200250
2007 2008 2009 2010 2011Exports
Imports
0102030405060708090
2007 2008 2009 2010 2011Exports
Imports
050100150200250
2007 2008 2009 2010 2011Exports
Imports
01020304050607080
2007 2008 2009 2010 2011Exports
Imports
020406080100120140160
2007 2008 2009 2010 2011Exports
Imports
010203040506070
2007 2008 2009 2010 2011Exports
Imports
020406080100120140160180200
2007 2008 2009 2010 2011Exports
Imports
0102030405060
2007 2008 2009 2010 2011Exports
Imports
 PRESS/641 
Page 4 of 4 
 
 
  Chart 1 (continued)
Monthly merchandise exports and imports of selected economies, January 2007-August 2011 
(Billion dollars)
Sources: IMF International Financial Statistics, Global Trade Information Services GTA database, national statistics.India South AfricaSingapore Chinese Taipei
Malaysia Thailand
Brazil Russia0510152025303540
2007 2008 2009 2010 2011Exports
Imports
051015202530
2007 2008 2009 2010 2011Exports
Imports
0510152025
2007 2008 2009 2010 2011Exports
Imports
051015202530
2007 2008 2009 2010 2011Exports
Imports
05101520253035404550
2007 2008 2009 2010 2011Exports
Imports
051015202530354045
2007 2008 2009 2010 2011Exports
Imports
024681012
2007 2008 2009 2010 2011Exports
Imports0510152025
2007 2008 2009 2010 2011Exports
Imports
END