According to the World Trade Organization, potential gains in global goods trade during the first quarter of 2024 might face challenges from regional conflicts and geopolitical tensions.
The Merchandise Trade Barometer's latest edition, released by the WTO on Friday, suggests a potential improvement in global goods trade after a lackluster performance in 2023. However, the near-term outlook is overshadowed by the persistent risks posed by geopolitical tensions.
The current index reading of 100.6 indicates a gradual recovery in goods trade in the early months of 2024. Nevertheless, the positive trajectory is at risk, given the potential impact of regional conflicts and geopolitical tensions.
In the third quarter of 2023, the volume of world trade in goods experienced a 0.4% decline compared to the previous quarter and a 2.5% decrease compared to the same period in 2022. The World Trade Organization attributes this sharp year-over-year drop to the robust growth observed in the first three quarters of 2022.
Trade in goods from January to October 2023 remained relatively stagnant, with the volume in the third quarter showing minimal change from the beginning of the year, recording only a 3.2% increase over two years.
These developments are more pessimistic than the WTO's October 5, 2023, forecast, which predicted a 0.8% growth in merchandise trade for the entire year 2023.
Examining the component indices of the barometer reveals mostly neutral indicators. Export orders (101.7) and air freight (102.3) show a slight uptick above trend, while container shipping (98.6) and raw materials trade (99.1) remain slightly below trend.
The index for automobile production and sales (106.3) remains significantly above trend, although recent momentum has diminished.
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