The second half of this year’s global goods trade growth will be slower than it was in the first quarter, according to the World Trade Organization’s most recent Goods Trade Barometer, which was released on August 23. Lockdowns in China and the conflict in Ukraine are two of the major contributors to growth patterns that have been negatively impacted. The sole exception that continues to perform better than 100.00, the index’s starting point, is container shipping. According to a WTO document, this figure is driven by an increase in exports through Chinese ports as a result of the relaxation of COVID-19 restrictions.
The Goods Trade Barometer is a composite leading indicator for world trade, providing real‐time information on the trajectory of merchandise trade relative to recent trends. The latest reading of 100.0 coincides exactly with the baseline value of the index, indicating on‐trend expansion. The barometer index is below the merchandise trade volume index, suggesting that year‐on‐year trade growth may slow further in Q2 while remaining positive, as the drag of the Russia‐Ukraine conflict is offset by the relaxation of pandemic controls in China.
Global merchandise trade volume reached a plateau in the first quarter, and year-over-year trade growth slowed to 3.2% from 5.7% in the fourth quarter of last year. Only a small portion of the Q1 slowdown may be attributed to the situation in Ukraine, which started in late February. Lockdowns related to COVID-19 in China also affected trade in the first quarter. The WTO’s most current trade prediction from last April, which expected a 3.0% increase in the volume of global goods trade in 2022, is comparable with the trade rise in Q1. The ongoing conflict in Ukraine, increasing inflationary pressures, and anticipated policy tightening in advanced economies have heightened uncertainty about the outlook, nevertheless.
The barometer’s component indices are a mixed bag, with most showing on trend or below trend growth. The forward‐looking export orders index (100.1) is on trend but has turned down. The automotive products index (99.0) is slightly below trend but has lost its upward momentum. Indices for air freight (96.9) and electronic components (95.6) are below trend and pointing down, while the raw materials index (101.0) has recently risen slightly above trend. The main exception is the container shipping index (103.2), which has risen firmly above trend as shipments through Chinese ports have increased due to the easing of COVID‐19 restrictions.
