Global trade growth is stagnating

“Although the level of the merchandise trade barometer is below recent trends in this area, global merchandise trade will continue to grow in the second quarter of 2022, but at a slower pace than in the first quarter. It should be weaker in the second half of the year,” the WTO explained in a press release.

According to the World Trade Organization, “World trade volume stabilized at 3.2% growth in the first quarter of 2022, down from 5.7% in the fourth quarter of 2021”.

According to the Geneva-based organization, “the slowdown recorded in the first quarter partially reflects the impact of the conflict in Ukraine that began at the end of February”. “Restrictions in China weighed heavily on trade in the first quarter,” the organization observes.

The Commodity Trade Barometer is a composite leading indicator that provides “real-time” information on how commodity trade is changing relative to recent trends. In the 2nd quarter, most of them showed growth at or below trend, WTO said. The Export Orders Index (100.1) is in line with the trend but lower. Auto Products (99.0) is slightly below trend, but has lost its bullish momentum. The Air Cargo (96.9) and Electronic Components (95.6) indices are below trend and trending lower, while the Commodity Index (101.0) recently moved above trend.

The main exception was the container shipping index (103.2), which was significantly above trend as the number of ships passing through Chinese ports increased due to the easing of Covid-19 restrictions.

Barometer’s latest analysis is in line with WTO trade forecasts from last April, which point to a 3.0% growth in world trade volume in 2022,” the report noted. “However, these forecasts are subject to the ongoing conflict in Ukraine, inflationary pressures and the expected tightening of monetary policies in developed countries. Uncertainty has increased”, WTO experts note. The revised forecast will be published in early October.