WTO goods trade barometer points to stagnating global trade growth

The goods trade barometer is a composite leading indicator for world trade, providing real-time information on the trajectory of merchandise trade relative to recent trends.

The latest World Trade Organisation (WTO) goods trade barometer is steady—reading is 100.0—but below the recent trend line for merchandise trade, suggesting that global goods trade continued to grow in the second quarter (Q2) this year, but the pace of growth was slower than in Q1 and is likely to remain weak in the second half of the year.

The latest reading coincides exactly with the baseline value of the index, indicating on-trend trade expansion, WTO said in a press release.

However, the overall barometer remains below a companion index representing actual merchandise trade volumes, suggesting that year-on-year (YoY) trade growth may slow further but remain positive when official Q2 statistics become available, with trade simultaneously weighed down by the conflict in Ukraine and buoyed by the lifting of COVID-19 lockdowns in China, WTO said.

The volume of world merchandise trade plateaued with YoY growth slowing to 3.2 per cent in Q1 2022, down from 5.7 per cent in Q4 2021. The slowdown in Q1 only partly reflected the impact of the conflict in Ukraine, which broke out in late February. Lockdowns in China also weighed heavily on trade in the first quarter, WTO noted.

The forward-looking export orders index (100.1) is on trend but has turned downwards. The index for air freight (96.9) is below trend and pointing down, while the raw materials index (101.0) has recently risen slightly above trend.

The main exception is the container shipping index (103.2), which has risen firmly above trend as shipments through Chinese ports have increased with the easing of COVID-19 restrictions.

The latest barometer reading is consistent with the WTO’s most recent trade forecast from last April, which predicted 3 per cent growth in the volume of world merchandise trade in 2022, WTO said.

However, uncertainty surrounding the forecast has increased due to the ongoing conflict in Ukraine, rising inflationary pressures and expected monetary policy tightening in advanced economies, it added.

Fibre2Fashion News Desk (DS)