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WTO Predicts World Trade Slowdown
The World Trade Organization has become the first international institution to change its prognosis for the year due to growing risks from the volatility of financial markets. In a WTO report published yesterday on results from 2006, the authors write about the slowing of the growth rate of world trade this year to 6 percent (from 8 percent last year, the highest since 2000) and of the world GDP to 3 percent (down from the previous prognosis of 5.2 percent).
The U.S. subprime mortgage market sent a shudder through world financial markets that has now passed. The consequences of that crisis in liquidity, which cost world monetary authorities more than $350 billion, have yet to be fully calculated. Yesterday's WTO report is the first attempt to assess the mortgage crisis, which began in the spring of this year.
The International Monetary Fund does not share its views. Although it too acknowledges the risks from the liquidity crisis, it emphasizes the growth of developing market, such as Russia and China. On Friday, the IMF issued a special statement saying that it considers the fundamental factors that hold up the world economy unchanged. It continues to urge stricter monetary policies to avoid inflation on developing markets. The higher interest rates implied in the IMF recommendations would lower oil prices, which would be keenly felt in Russia.
www.kommersant.com
All the Article in Russian as of Aug. 15, 2007
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