GENEVA, 4th September, 2024 (WAM) – Global goods trade has continued to recover in the third quarter of 2024 after demand for traded goods stalled in 2023 amid high inflation and rising interest rates, according to the latest WTO Goods Trade Barometer. Despite the positive signal from the barometer index, the outlook for trade remains highly uncertain due to rising geopolitical tensions, ongoing regional conflicts, shifting monetary policy in advanced economies and weakening export orders
After remaining flat since the final quarter of 2022, the volume of world merchandise trade started to turn up in the fourth quarter of 2023 and gained momentum in the first quarter of 2024. In 2024 Q1, trade was up 1.0 percent quarter-on-quarter and 1.4 percent year-on-year.
Quarter-on-quarter growth in the last two quarters averaged 0.7 percent, which is equivalent to 2.7 percent on an annualised basis. This is quite close to the WTO's most recent forecast of April 2024, which predicted a 2.6 percent increase in world merchandise trade volume in 2024. Recent data in value terms show weaker than expected trade growth in Europe and stronger than expected growth in other regions. As a result, the WTO's regional projections may need to be adjusted in the next WTO trade forecast update, which will be issued in mid-October.
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. Barometer values greater than 100 are associated with above-trend trade volumes while barometer values less than 100 suggest that goods trade has either fallen below trend or will do so in the near future.
All of the barometer's component indices are currently on or above trend, with the notable exception of the electronic components index (95.4), which is below trend and falling. Component indices for automotive products (103.3), container shipping (104.3) and air freight (107.1) are all firmly above trend, although the automotive products index appears to have lost momentum recently. New export orders (101.2), usually the barometer's most predictive component, is marginally positive but has turned down, which could be a cause for concern going forward. The index of raw materials (99.3) is nearly on trend but has declined sharply over the last three months.