Services trade likely to wane as growth slows in major economies: WTO

The barometer index reading for October fell to 98.3, slightly below its baseline value of 100 and well below the previous reading of 105.5 from the last release in June.

Services trade activity across the world appears to have weakened in the fourth quarter (Q4) this year and is likely to remain soft in the opening months next year, with slowing growth in major economies weighing on the post-pandemic recovery, according to the latest World Trade Organisation (WTO) services trade barometer released recently.

The findings are line with the late November goods trade barometer that indicated slowing merchandise trade volume growth in the closing months of 2022 and into 2023, WTO said in a release.

World services trade volume finally surpassed its pre-pandemic peak in the second quarter this year and was expected to remain strong in the third quarter, buoyed by spending on travel, information and communication technology (ICT) services, and financial services.

However, the barometer indicates that year-on-year growth in real commercial services began moderating in the third quarter and may slow further in the fourth—as well as into the new year—due to declining growth prospects in major service industry economies.

The component indices for container shipping (92.8) and services purchasing managers’ index (91.1) fell deep into contraction territory.

Fibre2Fashion News Desk (DS)