WTO Anticipates Fragile Recovery in Global Goods Trade

The World Trade Organization (WTO) has reported that a modest recovery in global goods trade is expected in 2024; however, it warned that ongoing geopolitical tensions continue to pose a downward risk.

The WTO released its Global Goods Trade Barometer Report, indicating that the Goods Trade Barometer stood slightly above the baseline value of 100 at 100.6. This suggests that global goods trade should gradually continue its recovery in the early months of 2024. However, the report highlights that regional conflicts and geopolitical tensions could easily derail any gains.

The report emphasized a 0.4% decline in the volume of world merchandise trade in the third quarter of the previous year compared to the preceding quarter. Furthermore, it highlighted a 2.5% decrease compared to the same period in 2022. The data underscored that from January to October 2023, merchandise trade mostly remained stable and showed little change since the beginning of the year.

The developments outlined in the report were noted to be more negative than the WTO’s previous estimate, forecasting a 0.8% growth in merchandise trade for the year 2023.

The report pointed out that the majority of Barometer components were neutral, indicating that export orders and air freight indicators were slightly above trend, while container shipping and raw material trade indicators lagged behind.

Despite a recent loss of momentum in the automotive production and sales index, the report stressed that the trend remained significantly above average.

While the report anticipates a recovery in merchandise trade growth below last year’s average in 2024, it also underscored that the prevalence of downward risks contributes to ongoing high uncertainty.

Readings above 100 in the Barometer indicate growth above trend, while readings below 100 suggest growth below trend. The WTO Global Goods Trade Barometer is published four times a year.

source: prepared by Melisa Beğiç

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