World trade in goods is slowing down after a rebound following disruptions caused by the Covid-19 pandemic due to multiple reasons such as recent supply shocks as well as a drop in demand, according to the WTO’s latest Goods Trade Barometer issued on Monday.
However, the barometer reading is broadly consistent with the WTO’s revised trade forecast issued last month, which foresaw global merchandise trade volume growth of 10.8 per cent in 2021, up from 8 per cent forecasted in March, followed by a 4.7 per cent increase in 2022, per a statement issued by the WTO.
The Goods Trade Barometer is a composite leading indicator providing real-time information on the trajectory of trade relative to recent trends ahead of conventional trade volume statistics.
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“Recent supply shocks, including port gridlock arising from surging import demand in the first half of the year and disrupted production of widely traded goods such as automobiles and semiconductors, have contributed to the barometer’s decline,” the statement said.
Export orders fall
It now appears that demand for traded goods is also easing, as illustrated by falling export orders, which further weighed down the barometer, it added.
Cooling import demand could help ease port congestion, but backlogs and delays are unlikely to be eliminated as long as container throughput remains at or near record levels.