Global goods trade remained depressed in the first quarter (Q1) this year, but forward-looking indicators point to a possible turnaround in Q2, according to the latest Goods Trade Barometer issued by the World Trade Organisation (WTO).

The value of the barometer index rose to 95.6 in the latest reading—up from 92.2 in March—but remained well below the baseline value of 100, suggesting a below-trend stabilisation and the beginnings of an upturn in merchandise trade volumes.

Mixed signals in the barometer's component indices suggest the road to trade recovery may be bumpy, WTO said in a release.

The barometer is a composite leading indicator for world trade, providing real-time information on the trajectory of merchandise trade relative to recent trends. Barometer values greater than 100 are associated with above-trend trade volumes while barometer values less than 100 suggest that goods trade has either fallen below trend or will do so in the near future.

The volume of merchandise trade in Q4 2022 was down by 2.4 per cent compared to the previous quarter and 0.8 per cent year on year (YoY).

The Q4 slump was driven by several related factors, including the ongoing war in Ukraine, stubbornly high inflation in advanced economies and tighter monetary policy globally, WTO noted.

The easing of pandemic controls in China starting in December 2022 appears to have boosted port traffic in the country, but this was outweighed by reduced vessel traffic in Europe.

The barometer’s indices representing container shipping (89.4) and air freight (93.5) continue to signal weakness.

The index of raw materials trade (99), meanwhile, finished just below trend.

The combination of strong positive and negative indicators makes the short-term outlook less certain than usual, WTO added.

Fibre2Fashion News Desk (DS)

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