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Washington: Global trade growth will grow at a “moderate pace” in the third quarter of the year, continuing the uptick from the prior period after two quarters of decline, the World Trade Organization said.
The WTO’s periodic goods barometer jumped to 99.1 from the previous reading of 95.6 announced in May, the Geneva-based organization said in a report published Thursday. The baseline of 100 indicates growth over the next quarter that’s in line with medium-term trends.
High commodity prices, tighter monetary conditions, and anemic import demand have weighed on global trade volumes, the report said.
Going forward, WTO said that its projected trade growth of 1.7 per cent this year, “is still attainable if trade picks up in the second half of the year as expected.”
The institution said surging exports of autos have contributed to stronger-than-expected growth in Japan’s gross domestic product, and Chinese auto exports have been unexpectedly strong.
Despite the WTO’s rosy outlook, leading economic indicators in the US and Europe are showing signs of slowing, partly due to continued interest rate hikes.
Last month, Port of Los Angeles shipments fell 26.8 per cent from a year earlier, and shipping companies like A.P. Moller-Maersk A/S and CMA CGM SA warn that trade volumes will likely be depressed for the rest of 2023.
Concerns about flagging trade growth may grow as China’s economic engine sputters. Weak Chinese economic data, and a worsening property crisis have compounded China’s sagging demand for cars, chips and electronics.
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