Air passenger traffic rose by 5.9 percent in July on a 12-month basis, but the cloudy economic outlook and high fuel prices could lead to weak growth in 2011, industry association IATA said on Thursday.

"This (July) increase was likely based on the much more optimistic economic outlook that marked the beginning of the year," Tony Tyler, the director general of the International Air Transport Association, said in an IATA press release.

"With business and consumer confidence now tanking, sluggishness in international trade, and high fuel prices, the expectation is for a weaker end of the year," he said.

Freight traffic, "which reflect economic sentiment more quickly than passenger markets" was down 0.4 percent in July compared to a year ago, IATA said.

"The earthquake and tsunami in Japan, coupled with the general economic gloom are ... the main driving factors of continued weakness," IATA said.

In terms of international passenger traffic, Latin American carriers achieved the strongest July growth, at 10.3 percent year-on-year, while European carriers increased traffic by 9.3 percent because of increased inward demand on currency factors, it said.

Japan continued to be strongly affected by the March earthquake and tsunami, with July domestic passenger traffic down 16.7 percent year-on-year, but lower than the 20.3 percent decline in June, IATA added.

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