The United Nations on Tuesday reported a "sharp slowdown" of world trade, attributing the decelerating global trade growth to "a declining import demand " in Europe and "anemic aggregate demand" in the United States and Japan.
"Growth of world trade decelerated sharply during 2012, mainly owing to declining import demand in Europe, as the region entered into its second recession in three years, and anemic demand in the United States and Japan," said the UN report, "World Economic Situation Prospects 2013" (WESP).
The report was launched here Tuesday by the UN Department of Economic and Social Affairs.
After plunging by more than 10 percent in the Great Recession of 2009, world trade rebounded strongly in 2010, said the report.
"Since 2011, the recovery of the volume of world exports has lost momentum," the report said. "Developing countries and economies in transition have seen demand for their exports weaken as a result."
"The monthly trade data of the different regions and countries showed a clear sequence of the weakening demand that originated in the euro area transmitting to the rest of the world," the report said.
Import demand in Greece, Italy, Portugal and Spain started to decline in late 2011 and fell further during 2012, but the weakness in trade activity has spread further to the rest of Europe as well, including France and Germany, the report said.
"In tandem, imports of the United States and Japan also slowed significantly in the second half of 2012," the report said. "East Asian economies that trade significantly with the major developed countries have experienced commensurate declines in exports."
"Further down the global value chain, energy and other primary- exporting economies have seen demand for their exports weaken as well," the report said. "Brazil and the Russian Federation, for instance, all registered export declines in varying degrees in the second half of 2012."
"Lower export earnings, compounded by domestic demand constraints have also pushed down GDP growth in many developing countries and economies in transition during 2012," the report said. "This has led to flagging import demand from these economies, further slowing trade of developing countries."