WTO has revised its 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.

Director-General Pascal Lamy said: “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.”

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, points out WTO.

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 3.6% and their output to go up by 1.5%. Meanwhile, shipments from developing economies are estimated to increase by 8.6% and GDP by 5.9%.