Economic shocks like the eurozone debt crisis are behind an expected slowdown in global trade growth to 3.7 percent this year, from 5.0 percent in 2011, the World Trade Organization said Thursday.

The WTO said that the world economy had "lost momentum" as the 2011 figure fell below its September forecast of 5.8 percent.

Multiple setbacks during the year had dampened trade growth more than forecast, the body said, resulting in a stronger than expected easing in the last three months of the year.

In addition to the eurozone debt crisis, WTO economists cited the effects of the Japanese earthquake and tsumani and severe flooding in Thailand.

A year ago, the Geneva-based body had predicted 6.5 percent growth for 2011 after a rebound of 13.8 percent in 2010 following the financial crisis.

The WTO expects trade to recover somewhat by 2013 and result in additional growth of 5.6 percent.

"More than three years have passed since the trade collapse of 2008-09, but the world economy and trade remain fragile," WTO chief Pascal Lamy warned.

"The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods," he said.

The latest WTO forecast assumes growth in global production this year of 2.1 percent, down from 2.4 percent in 2011.

In 2011 however, developed countries exceeded export expectations with growth of 4.7 percent, driven by a 7.2 percent rise in exports from the United States.

But the 5.4 percent growth rate recorded among developing countries was lower than anticipated as they were hit by an interruption in oil supplies during the Libyan conflict and the Japanese earthquake disrupted supply chains.

"The flooding in Thailand threw even more sand in the gears of global supply chains," Lamy told a news conference at the WTO headquarters.

"But many of the shocks that hit developing countries last year were one-off events. Growth in these countries should normally bounce back."

channelnewsasia.com