The World Trade Organization (WTO) published the World Trade Outlook Indicator 2019, which expects slower trade growth and the weakness is possible to extend into the first quarter of 2019. The decline of several trade-related indicators should alert policy makers for a sharper slowdown, whether the current trade tensions remain unresolved.
The WTOI reading seems to be the weakest, since March 2010 and below the baseline value of 100 for the index, signaling below-trend trade expansion into the first quarter.
Generally, the weakness was due to rapid decrease in export orders, international air freight, automobile production and sales, electronic components and agricultural raw materials.
Yet, the Organization informs that only the index for container port throughput remained almost stable at 100.3, reflecting on-trend growth.
In addition, the ongoing US-China tariffs sustained container shipping, whereas technicality problems in the German automotive sector may have contributed to weakness in automobile production and sales.
The loss of trade growth focuses on the need to reduce trade tensions, as along with political risks and financial volatility could bring additional barriers and result to an economic downturn.
Trade growth is currently forecast to slow to 3.7% in 2019 from an expected 3.9% in 2018, but these estimates could be revised downward if trade conditions continue to deteriorate.
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