GDP may dip: World Bank

Asian and transition economies are expected to register either lower or stagnant GDP growth in 2004 compared to the previous year. Despite the lower projection, the growth rate of these economies will still be higher than the world average, the World Trade Report 2004 said.

For the global trade, the report has projected the strenthening of the global expansion in the second half of 2003 would continue in 2004.

"Global trade is expected to expand by 7.5 per cent in 2004, twice as fast as output. Stronger global economic activity will lead to faster growth of world trade. Most of the predicted acceleration in global output is attributable to North America, Western Europe and Latin America," it said.

The report, however, added that a sudden correction in the United States current account deficit, a faltering of recovery in Western Europe and a sharp increase in energy price could affect these forecasts.

"A stronger than expected rise in US private savings ratio, provoked by a correction of house or stock prices, could lead to a slower than projected increase in imports, with negative repercussions on exports of countries dependent on the US markets," the report said.

The report also noted that the share of agricultural trade in world trade has decreased steadily in the longer term.

Despite this, agricultural trade remains very important for many countries and exports of some agricultural products have also expanded strongly, it noted.

It noted that the processed agricultural products have been a more dynamic component of international agricultural trade in the 1990s than unprocessed and semi-processed goods. Agriculture exports of developing countries to high-income markets also experienced this structural change, it added.

Referring to trade development by products, the report said that a breakdown of world exports of manufactured goods reveals that the most dynamic product subcategory by far was office and telecom equipment, which expanded at twice the rate observed for total manufactured goods in the 1990s. The crisis in the information technology sector in 2000 arrested this trend. Among the subcategories of manufactured goods which recorded below average trade growth in the 1990'sare iron and steel and textile products, both showing a significant decline in their share in the world trade over the 1990-2002 period.