FRANKFURT (MNI) – The European Central Bank said Monday that the
outlook for global and Eurozone trade has brightened, but it warned that
the improvement could lose momentum in the coming quarters.
“In line with recent developments, prospects for both world trade
and euro area exports have improved notably of late,” the central bank
said its 2009 Annual Report.
“It may be the case that global supply chains are helping to
amplify the trade recovery via the same mechanisms which seemed to
exacerbate the trade contraction,” it explained.
“However, the short-lived nature of some of the factors behind the
recent upturn in economic activity suggests that there may be a risk
that this rebound in world economic activity and thus also of world
trade could experience some loss of momentum in the coming quarters,”
the ECB assessed.
Developments ahead will largely depend on the “extent of the
recovery in world demand and the composition of expenditure,” it said.
“In this respect, a resurgence of protectionist policies around the
world would potentially dampen the outlook for world trade.”
Therefore, any protectionist measures must be avoided, since they
would not only impair global trade but also the global growth potential
in the long run, the ECB warned.
–Frankfurt bureau; +49-69-720142; jtreeck@marketnews.com
[TOPICS: M$$EC$,M$X$$$,MT$$$$,M$$CR$,MGX$$$]
