Background

Global trade in goods should continue to expand in volume terms during the third quarter of 2018 but the pace of that growth should be slower than earlier in the year, the World Trade Organization said Aug. 9.

The WTO’s world trade outlook indicator combines several trade-related indices into a single composite indicator of trade growth in the near future by measuring short-run performance against medium-term trends. A WTOI reading of 100 indicates growth in line with medium-term trends, readings greater than 100 suggest above-trend growth, and readings below 100 indicate the reverse.

According to the WTO, the most recent WTOI reading of 100.3 is below the previous value of 101.8 and just above the baseline value of 100, suggesting slower growth in the coming months. The WTO states that this loss in momentum “reflects weakness in component indices including export orders and automobile production and sales, which may be responding to the ratcheting up of trade tensions.” The indices for air freight and container port throughput remain above trend but growth momentum in both appears to have already reached its peak. Electronic components are also above trend while agricultural raw materials moved from below trend to on trend.

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