Trade growth is likely to slow in the closing months of 2022 and into 2023, according to the latest WTO Goods Trade Barometer released yesterday (28 November), as the global economy continues to be buffeted by strong headwinds.
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 Goods Trade Barometer is a composite leading indicator for world trade, providing real-time information on the trajectory of merchandise trade relative to recent trends. Values greater 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 trade forecast of 5 October, which predicted merchandise trade volume growth of 3.5% in 2022 and 1% 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% year‐on‐year increase in the second quarter after growing 4.8% in the first quarter. For the forecast to be realised, trade growth would have to average around 2.4% year-on-year in the second half of 2022.
The Barometer Index was weighed down by negative readings in sub-indices representing export orders (91.7), air freight (93.3) and electronic components (91.0). 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.