* World trade continues on downward trend
* Signs of stabilisation, particularly in Asia
* Trade contracts 8.4 pct in year to May
GENEVA, July 23 (Reuters) - World trade volumes remain on a sharp downward trend, but signs of stabilisation are appearing, particularly in Asia, the Dutch CPB research institute said on Thursday.
Trade volumes in the 12 months to May were 8.4 percent lower than a year earlier, compared with a 6.4 percent decline in the 12 months to April, it said in its latest World Trade Monitor.
In both April and May, trade volumes were about 20 percent lower than a year earlier.
The figures reflect the massive slowdown in exports and imports reported by countries around the globe, as the economic crisis shrivels demand.
On Wednesday, the World Trade Organisation repeated its forecast that trade would contract 10 percent this year, the biggest annual contraction since World War Two.
The CPB Netherlands Bureau for Economic Policy Analysis, whose data are used by the European Commission and World Bank, said the falls in April and May contrasted with growth of 9.9 percent in the year to November 2006, the peak of the current cycle.
But in the three months to May 31, trade volumes dropped only 3.6 percent against the previous three months, compared with a 6.0 percent fall in the three months to April and a 12.7 percent drop in the three months ended February.
"No regions showed positive trade momentum yet, but Asia was close to stabilisation," it said.
On the monthly figures, which are notoriously volatile, trade volumes in May were 1.3 percent lower than in April, when they declined 1.0 percent from March. (For the full CPB monitor, click on: http://www.cpb.nl/eng/research/sector2/data/trademonitor.pdf ) (Reporting by Jonathan Lynn; Editing by Kevin Liffey)