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Global recession in the offing next year: WTO

The next director-general of World Trade Organisation said on Tuesday that he expects a global recession next year.

"We should brace ourselves for a period of global recession for the whole of next year," Supachai Panitchpakdi, director-general designate of the Geneva-based global trade body, said in Kulala Lampur on Tuesday.

Supachai said that inventories of IT products are unlikely to be exhausted until the fourth quarter of 2002 when demand for electronic products may begin to spur economic recovery.

Supachai, speaking at a private economic conference, added that most countries have already adjusted downward their economic forecasts for 2002, but the projections still include optimism for economic recovery.

"I think we should be cautious of that kind of projections," he said.

Supachai, who is set to become director general of the WTO in 2002, said that there was lack of financial reforms in Asia and "mountains of non-performing loans" that would take time to resolve.

He said that governments have taken over large quantities of private sector debt and must now be vigilant about reducing these debts.

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