World going through stormy period: WTO chief Lamy

IANS, September 07, 2011
New Delhi, Sep 6 (IANS) The global economy is going through a ‘stormy period’ and is likely to witness further slowdown in growth, unsustainable fiscal deficits and high unemployment, World Trade Organisation (WTO) director general Pascal Lamy said Tuesday.

‘The world economy, which was showing signs of recovery at the beginning of this year, is again being confronted by serious challenges,’ Lamy said at an event organised by Consumer Unity and Trust Society (CUTS) International here.

He said the financial crisis has now become a growth crisis and many economies, especially the developed economies, were not growing at a pace sufficient to achieve the ‘fiscal consolidation needed after the extraordinary measures taken during the financial crisis and to reduce the socially destructive high unemployment’.

Lamy, who is on a two-day visit to India said, rising sovereign debt problems have resulted in loss of confidence in the financial markets.

He said growth in global trade volume was likely to slump to 6.5 percent in 2011 as against a record 14.5 percent jump in the previous year.

‘The growth of international trade in 2010 led the recovery, particularly in emerging economies that were largely innocent casualties of the crisis,’ he said.

The WTO chief said global trade was likely to decline due to weak demand.

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