Global trade to slow amid eurozone debt crisis

As the global economy slows, so will global trade. AFP/CNA reports the latest trade growth projection from the World Trade Organisation:

The World Trade Organization (WTO) on Friday slashed its 2012 global trade outlook, citing the eurozone debt crisis and weak growth in the US and China as key factors behind the downgrade.

Global trade is now expected to grow 2.5 per cent in 2012 compared with a previous forecast of 3.7 per cent, the WTO said in a statement released in Singapore.

It also cut its global trade growth outlook for next year to 4.5 per cent from 5.6 per cent.

The eurozone sovereign debt crisis was cited as a key factor beyond the slowdown, and despite the European Central Bank's latest bond-purchase plan, the crisis may have to get worse before it can get better. From Bloomberg:

Italy and Spain won’t request bailouts unless a new surge in bond yields leaves them shut out of markets, as no government will voluntarily accept conditions imposed for the aid, a senior Italian government official said.

“There won’t be any nation that voluntarily, with a pre- emptive move, even if rationally justified, would go to an international body and say, ‘I give up my national sovereignty,’” Gianfranco Polillo, undersecretary of finance, said in an interview in Rome late yesterday. “I rule it out for Italy and for any other country.”