The World Trade Organisation (WTO) has downgraded its 2012 world trade expansion forecast from 3.7% to 2.5% after slow global growth impacted H1 trade volumes.

Disappointing output and employment data in the US, slower growth indices in China and the volatility caused by the European debt crisis also prompted the WTO to bring its 2013 estimate down from 5.6% to 4.5%.

WTO director general Pascal Lamy says: “In an increasingly interdependent world, economic shocks in one region can quickly spread to others. Recently announced measures to reinforce the euro and boost growth in the US are therefore extremely welcome.

“But more needs to be done. We need a renewed commitment to revitalise the multilateral trading system which can restore economic certainty at a time when it is badly needed. The last thing the world economy needs right now is the threat of rising protectionism.”

Trade volumes only grew 0.3% between Q1 and Q2 2012, or 1.2% at an annualised rate. The WTO adds that the slowdown was driven by a strong deceleration in imports of developed countries and weak exports from developing economies.

US and Japanese second quarter trade figures showed increases both in exports and imports (between 5 and 8.5% year-on-year), but intra and extra-EU trade continued to drop, particularly affecting the WTO forecast.

However, the organisation is optimistic that the forecast could improve if the European Central Bank’s recently announced bong purchasing programme has an immediate positive impact on EU import demand.