World trade growth to slow down in end-2022 and into 2023: WTO Barometer

Growth in global trade is likely to slow in the final months of 2022 through 2023 as the global economy continues to suffer from the uncertainty of the Ukraine war, high interest rates, higher energy prices and monetary tightening, according to the latest WTO. Commodity trading barometer.

According to a statement issued by the World Trade Organization on Monday, “the decline in the merchandise measure is consistent with the October 5 WTO Trade Outlook, which projected merchandise trade volume growth of 3.5 percent in 2022 and 1 percent in 2023.”

The barometer reading also corresponds to India’s export performance which has started to slow sharply since July 2022 and declined by 16.5 percent (YoY in October 2022.

The Commodity Trade Barometer is a leading composite indicator of global trade, providing real-time information on the trajectory of merchandise trade relative to recent trends. Values ​​greater than 100 indicate expansion above trend while values ​​less than 100 indicate growth below trend.

The statement indicated that the current reading of 96.2 is lower than the basic value of the index and the previous reading of 100.0, which reflects the decline in demand for traded commodities.

The barometer index was affected by negative readings in the sub-indices representing export orders (91.7), air freight (93.3), and electronic components (91.0). Together, these factors point to calming business sentiment and weaker global demand for imports.

Container shipping and raw materials have also lost momentum finishing just below the trend.

Cars are getting better

However, automobiles were an exception to the Automotive Products Index (103.8) which is moving above trend due to strong auto sales in the US and increasing exports from Japan as supply conditions improve and as the yen continues to weaken, the WTO statement said.

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The Commodity Trade Barometer Index combines several indicators of trade-related data into a single composite index that predicts turning points in global merchandise trade volumes.

Component indices include an index of new export orders derived from purchasing managers’ indices, an air freight index that is sourced from the International Air Transport Association, a freight index that represents the container turnover rate at major international seaports by volume, and an auto sector index based on sales and/or passenger car production in leading economies and an indicator of trade in agricultural raw materials (mostly wood) based on customs data by quantity.