Trade growth is likely to slow further into the fourth quarter of 2018, according to the WTO’s latest World Trade Outlook Indicator (WTOI) issued on 26 November. The most recent WTOI reading of 98.6 is the lowest since October 2016 and reflects declines in all component indices.
The World Trade Outlook Indicator (WTOI) is designed to provide “real time” information on the trajectory of world trade relative to recent trends. The latest Indicator is below the previous value of 100.3 and falls under the baseline value of 100 for the index, signalling that trade growth in the coming months is expected to be below-trend, WTO noted.
The latest value of 98.6 is lower than the previous value of 100.3 and falls under the baseline value of 100 for the index, signalling that trade growth in the coming months will be below-trend. The most recent reading is the lowest since October 2016.
The WTOI line in the chart underneath (blue) appears lower than the merchandise trade line (red) for Q2, which suggests that quarterly merchandise trade volume growth momentum will continue to soften going forward.
The further moderation in the overall WTOI index was driven by declines in all indices, with export orders (96.6) in particular continuing to decline steadily over the course of the year and remaining below trend. Indices for automobile production and sales (96.9), electronic components (93.9), and agricultural raw materials (97.2) have moved from on trend to below trend.
Meanwhile, international air freight (100.0) and container port throughput (101.2) have dipped, but remain on trend.
