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Latest data point towards sluggish trade growth in Q3
11
Jul '16
WTO DG Azevêdo and Chinese Minister of Commerce Gao Hucheng meet with the press at the 8 July launch in Shanghai of WTOI
WTO DG Azevêdo and Chinese Minister of Commerce Gao Hucheng meet with the press at the 8 July launch in Shanghai of WTOI
There's bad news for global trade. The WTO's new World Trade Outlook Indicator (WTOI) designed to provide “real time” information on trends in global trade, which was unveiled in Shanghai on July 8, indicates that trade growth to remain sluggish in the third quarter of 2016.

Still, the WTOI was more positive than the WTO's quarterly merchandise trade volume index after a weak result in Q1. This suggests that world merchandise trade may rebound in Q2 but that the underlying weakness will likely persist into Q3.

For the current period, the WTOI came in slightly below trend, with a reading of 99.0, and with a downward tendency in the most recent data, signalling that trade growth will continue to be sluggish in July and August.

WTO Director-General Roberto Azevêdo said, “In serving as a quarterly signal of current and short-term trade conditions, the World Trade Outlook Indicator responds to strong interest from policymakers and the business community for more immediate, real time information on trade and trading conditions. The WTOI should provide an early signal if trade is likely to slow or accelerate in the near future. At present it suggests that trade growth will remain weak into the third quarter of 2016.”

The reading was slightly more positive than that for merchandise trade, which declined in the first quarter 2016, as noted in the WTO's recent quarterly trade statistics. The WTOI therefore suggests that world merchandise trade may rebound in the second quarter, but that the underlying weakness will persist into the third quarter.

Components of the WTOI give a mixed picture. Export orders in leading traders have rebounded above trend and continue to pick up. Meanwhile, international air freight data from IATA and container throughput data from major seaports remain weak but show signs of stabilising. (SH)

Fibre2Fashion News Desk – India

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