MercoPress. South Atlantic News Agency

WTO forecasts world trade to grow 8,5%.

Despite the sharp rise in oil prices the volume of world trade is likely to grow by 8.5% in real terms by the end of 2004, a significant improvement over 2003 according to World Trade Organization statistics

While the price increases for oil and other commodities may dampen growth in trade and overall output in 2005, these effects are being outweighed in 2004 by vigorous trade expansion in many countries and stronger than expected recovery in several others. The vigorous trade expansion observed in the first half of 2004 is expected to provide enough momentum to raise global trade volume by 8.5%, according to the report.

"Growth in world trade in 2004 will not be adversely affected by higher oil prices to any great extent because we are seeing good growth in trade and output in China, Latin America and Africa. We have also seen stronger than expected economic recovery in Japan. Strong demand is behind rising prices for oil and other commodities and markets appear to be handling this well," said Director-General Supachai Panitchpakdi.

The figures are in the WTO latest annual report on International Trade Statistics. The report shows that world merchandise trade increased in nominal terms by 16% to $7.3 trillion in 2003. In real terms, merchandise trade grew by 4.5% in 2003, compared with 3% in 2002 and a decline in 2001. Trade in commercial services grew by 13% to $1.8 trillion in nominal terms. Regarding the European Union, the WTO highlights that the expansion to 25 members has given Western Europe and transition economies a significant boost.