World Trade Outlook Indicator suggests global trade growth to stay above trend
Geneva: The World Trade Outlook Indicator (WTOI) released by the World Trade Organization on 12 February suggests solid trade volume growth in the first quarter of this year despite little change in the WTOI’s current value of 102.3 from 102.2 in November.
It indicates “strong results for air freight, container shipping and export orders”, suggesting that “while the trade recovery may moderate in due course, it will likely continue in the coming months and remain above trend.”
According to the component indices of the WTOI’s current value of 102.3, while the container port throughput at 104.3 and air freight at 103.2 are firmly above trend, export orders at 102.8 have reached their highest level since 2011. Clearly, these three components indicate sustained recovery.
In contrast three other components- automotive products at 101.0, agricultural raw materials at 100.8 and electronic components at 94.1- suggest “a weakening of consumer sentiment.” These results, the WTO claims, “are somewhat stronger” than its most recent trade forecast issued on 21 September. That forecast had suggested merchandise trade volume growth of 3.6% for 2017 and 3.2% in 2018. The WTO will issue the next trade forecast in April.
The WTO has maintained that WTOI is not intended as a short-term forecast, suggesting that it provides an indication of trade growth in the near future. WTOI aims to identify turning points and gauge momentum in global trade growth. Further, readings of 100 indicate growth in line with medium-term trends, while reading above 100 suggest above trend growth and below 100 indicate reverse. “The WTOI has recorded readings of 102 or higher since February 2017, which coincided with a strengthening of global trade flows,” it argued.