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World economic crisis

Stocks surge but outlook grim, says WTO

Article published on the 2009-03-24 Latest update 2009-03-24 14:57 TU

An investor in Wuhan, China(Photo: Reuters)

An investor in Wuhan, China
(Photo: Reuters)

While stockmarkets around the world responded positively to the news from the US, the financial crisis appears to be far from over. Figures from the World Trade Organisation (WTO) show global trade this year is set for its biggest fall since World War II.

Stocks soared in Asia and Europe, with economic data leading investors to hope that the recession hit its lowest point in January and the Obama adminstration's announcement that it will devote billions to saving banks.

But Britain's inflation figures are unexpectedlyhigh, at 3.2 per cent in February and 3.0 per cent in January.

The WTO forecast says that trading volumes of the developed economies will contract by ten per cent this year, while trade in developing economies they are likely to slip by two to three per cent. 

In 2008 world trade grew by two percent.

But the WTO points out that import data for China, Singapore, Taiwan and Vietnam turned positive in February, stopping months of decline.

But outlook for the airline industry is grim. The airline industry association, The International Airline Transport Association (IATA) on Tuesday sharply increased its loss forecast for carriers this year to 4.7 billion dollars (3.46 billion euros). This was a huge rise from the 2.5 billion dollar (1.84 billion) loss predicted in December.

Passenger traffic continues to slide, falling nearly six per cent over the year. Asia-Pacific carriers are expected to post the biggest losses, followed by European carriers.