Global trade in goods is likely to remain weak in early 2020, according to the WTO Goods Trade Barometer, with the coronavirus outbreak expected to dampen trade prospects further.
The real-time measure of trade trends fell to a reading of 95.5 this month, down from 96.6 in November and well below the index’s baseline value of 100. A reading of 100 or above is a sign of above-trend growth.
This below-trend performance could be reduced further by a new global health threat, the World Trade Organization (WTO) says.
The Goods Trade Barometer provides information on the current trajectory of world merchandise trade relative to recent trends, based on best-available forward-looking data. It does not account for recent developments such as the outbreak of Covid-19, the new coronavirus disease, which may dampen trade prospects further, according to the WTO.
In total, the volume of world merchandise trade was down 0.2% in the third quarter of 2019 compared to the previous year. The WTO said that while figures for the fourth quarter may pick up “slightly”, the latest barometer reading provides no indication of a sustained recovery and growth may fall again in the first quarter of 2020.
The drop has largely been driven by additional declines in areas such as container shipping (94.8) and agricultural raw materials (90.9), as well as the plateauing of the automotive products index (100.0). Although indices for export orders (98.5), air freight (94.6) and electronic components (92.8) are all below baseline, they appear to have stabilised and would normally be expected to rise in the coming months.
“Every component of the Goods Trade Barometer will be influenced by the economic impact of Covid-19 and the effectiveness of efforts to treat and contain the disease,” the WTO said in its update.