WTO: Global trade slows in first quarter

The World Trade Organization (WTO) reported that global merchandise trade remained stagnant in the first quarter of the year, but forward-looking indicators point to a possible turnaround in the second quarter. The WTO has published the Global Merchandise Trade Barometer Report. The report stated that the WTO Merchandise Trade Barometer, which was 92.2 points in the previous reading, remained below the basic value of 100 points despite rising to 95.6, indicating that this is a stability below the trend and the start of an increase in trade volumes. The report, which recalled that merchandise trade volume decreased by 2.4 percent on a quarterly basis and 0.8 percent on an annual basis in the last quarter of last year, drew attention to the fact that the decline in the fourth quarter of 2022 was driven by several related factors, including the ongoing war in Ukraine, persistently high inflation in advanced economies, and tighter monetary policy globally. The report noted that the easing of epidemic restrictions in China at the end of last year increased port traffic in the country, but decreasing ship traffic in Europe outweighed this, and that preliminary data showed that trade would remain stagnant in the first quarter of 2023. "A bumpy road" However, the report noted that the recent increase in export orders showed that demand for traded goods increased in the second quarter, and noted that these results were largely consistent with the WTO's forecast published on April 5, which foresaw a 1.7 percent growth in world goods trade in 2023. The report emphasized that the mixed signals in the barometer components suggest that the road to trade recovery may be bumpy. The report stated that the automotive products index rose above the trend at 110.8, supported by strong sales in the US and Europe, while the export orders index rose above the trend at 102.7, following the decline following the outbreak of war in Ukraine. The report also noted that the indices representing container shipping, air freight and electronic components trade all remained below trend and continued to signal weakness. Readings above 100 on the barometer indicate growth above trend, while readings below 100 indicate growth below trend. The WTO Global Merchandise Trade Barometer is published four times a year.