The latest WTOI is still well below the baseline value of 100 for the index, indicating continued falling trade growth in the first half of 2019. It should be noted that the WTOI does not reflect some major trade measures announced in recent days. The outlook for trade could get worse if rising trade tensions are not resolved or if macroeconomic policy does not manage to adjust to changing circumstances.
The latest result of the WTOI was driven by reductions in all but two component indices. Indices for international air freight (92.3), automobile production and sales (92.2), and agricultural raw materials (92.4) fell further below trend.
What is more, the index for container port throughput (101.0) also fell but remained above 100, showing growth according to recent trends. Indices for export orders (96.6) and electronic components (96.7) have bottomed out, even as both remained firmly below-trend.
For their April trade forecast, WTO economists estimated that merchandise trade volume growth would decrease to 2.6% in 2019, down from 3.0% in 2018, before increasing to 3.0% in 2020.
There are significant downside risks to the 2019 forecast. Any rebound in 2020 would depend on reduced trade tensions and/or improved macroeconomic performance
The WTOI is not intended as a short-term forecast, despite the fact that it provides an indication of trade growth in the near future. It aims to identify turning points and gauge momentum in global trade growth. For this reason, it complements trade statistics and forecasts from the WTO and other organizations. Readings of 100 indicate growth in line with medium-term trends; readings greater than 100 suggest above-trend growth, while those below 100 suggest below trend growth.
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