That would align it with global gross domestic product (GDP), which Fitch projects to grow by 2 per cent, down from 2.7 per cent last year. Trade growth seems unlikely to outpace GDP in the medium term, as globalisation stalls, Fitch noted.

In a new report, Fitch said that monetary tightening, fading fiscal support and service sector reopening are now weighing on global goods demand, which leapt extraordinarily during the pandemic.

World industrial production is also decelerating rapidly, it noted in a release.

The volume of world trade in goods is now falling, partially offset by a recovery in services trade as tourism and transport rebounds. But services account for only 22 per cent of total trade and this is not enough to fully cushion aggregate trade growth, it said.

Supply-chain bottlenecks are no longer a key constraint on trade flows. The recent slowdown in trade now seems more a reflection of slowing demand, it noted.

US and global demand for consumer goods is weakening, which reflects the phase-out of US consumer-focused fiscal stimulus, monetary tightening and the rebalancing of demand back towards services after the lifting of COVID-19 restrictions.

Fibre2Fashion News Desk (DS)