Geneva: Despite remaining depressed in the first quarter of 2023, global goods trade may see a turnaround in the second quarter of the year according to the latest World Trade Organization (WTO) Goods Trade Barometer, which is a composite leading indicator for world trade, providing real‐time information on the trajectory of merchandise trade relative to recent trends.
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 stabilization and the beginnings of an upturn in merchandise trade volumes.
The barometer’s component indices are currently mixed which suggests that the road to trade recovery may be bumpy. The automotive products index (110.8) has risen firmly above the trend on the back of strong sales in the United States and Europe. The highly predictive export orders index (102.7) has also returned above trend after a dip following the outbreak of war in Ukraine. In contrast, the indices representing container shipping (89.4), air freight (93.5) and electronic components trade (85.2) all continue to signal weakness. The index of raw materials trade (99.0), meanwhile, finished just below the trend. The combination of strong positive and negative indicators makes the short-term outlook less certain than usual.
Earlier, the volume of world merchandise trade was down 0.8% year‐on‐year in Q4 of 2022 following a 2.4% quarter‐on‐quarter decline. The slump was driven by several related factors including the ongoing war in Ukraine, stubbornly high inflation in advanced economies, and tighter monetary policy globally. The relaxation of pandemic controls in China appears to have boosted port traffic in the country, but this was outweighed by falling throughput in European ports. Preliminary data suggest that trade remained depressed in Q1 of 2023 but increased export orders point to a turnaround in Q2. These results are consistent with the WTO’s most recent trade forecast, which called for 1.7% merchandise trade growth in 2023.
– global bihari bureau
