7 May 2009

Wolrd Bank says global trade drop may be at bottom

The following appeared in today's edition of "The Star".

The drop in world trade caused by the global financial crisis seems to be bottoming out, but could take years to recover to pre-crisis levels, a World Bank economist said yesterday.

Bernard Hoekman, director of the World Bank's international trade unit, also said protectionism has been held in check by the integrated nature of the global economy and most protectionist measures applied so far have been directed at industries that have traditionally demanded protection.

The World Bank has forecast trade to drop 6.1 per cent this year as a result of the crisis, which made credit harder to get and led to a "very sharp" 4 per cent drop in global production because of reduced demand, he said.

"We're seeing now signs that this is bottoming out. Certainly the rate of decline has dropped," Hoekman said. ``We'll see if that persists and we have reached the bottom."