WTO goods trade barometer sinks below trend as import demand weakens

30 Nov '22

2 min read

Pic: Shutterstock

Trade growth is likely to slow in the closing months of 2022 and into 2023 as the global economy continues to be buffeted by strong headwinds, according to the latest World Trade Organization (WTO) goods trade barometer. The current reading of 96.2 is below both the baseline value for the index and the previous reading of 100.0, reflecting cooling demand for traded goods.

The barometer is a composite leading indicator for world trade, providing real-time information on the trajectory of merchandise trade relative to recent trends. Values more than 100 signal above-trend expansion while values less than 100 indicate below-trend growth.

The downturn in the goods barometer is consistent with the WTO's October trade forecast, which predicted merchandise trade volume growth of 3.5 per cent in 2022 and 1 per cent in 2023 due to several related shocks including the war in Ukraine, high energy prices and monetary tightening in major economies.

Merchandise trade posted a 4.7 per cent year-on-year increase in the second quarter after growing by 4.8 per cent in the first quarter. For the forecast to be realised, trade growth would have to average around 2.4 per cent year-on-year in the second half of 2022, WTO said in a release.

The barometer index was weighed down by negative readings in sub-indices representing export orders (91.7) and air freight (93.3). Together, these suggest cooling business sentiment and weaker global import demand.

The container shipping (99.3) and raw materials (97.6) indices finished only slightly below trend but have lost momentum.

Fibre2Fashion News Desk (DS)

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