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The WTO predicts a slow growth in world trade in goods in the near future

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Short-term growth rates in global trade will remain low due to events in Ukraine and anti-VOCID blockades in China. This is the conclusion reached by the secretariat of the World Trade Organization (WTO), which published in Geneva on Monday, the quarterly data of the indicator of trade in goods. This indicator is now 99 points on a scale of one hundred points, which is slightly higher than the February figure (98.7 points).

As the WTO noted, “the conflict in Ukraine and the recent China pandemic blockades appear to be hampering global trade in goods in the first half of 2022.” The commodity barometer is “now at 99 points, just below the 100-point baseline.” This gives reason to conclude that there is “a slow and steady growth in trade in goods.”

According to WTO experts, “the latest forecasts reduce previous optimism,” which was expressed at the time of the release of the February barometer data.

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According to February estimates, “trade could approach a turning point and strong growth is expected in the near future.” The organization does not rule out that the expected expansion did not take place due to the events in Ukraine, which at the end of February “caused a sharp rise in food and energy prices, which is usually associated with a reduction in real incomes and a decrease in “The imposition of major roadblocks in China to combat the new outbreak of COVID-19 has led to further disruptions in trade and production,” the organization said.

Among the components of the May barometer, a particularly low level is characteristic of maritime container traffic (95 points). Most of the other components are close to 100 points. These are, in particular, air freight (99.9), export orders (101.2) and raw materials (99.5).

In April, the WTO revised down its forecast for growth in world trade in goods in 2022, released in October last year (from 4.7% to 3%). According to experts, the current indications of the barometer are “generally in line with the April forecasts”.

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“The trade barometer of goods,” the WTO explained, reflects “a real-time trajectory of trade in goods relative to recent trends.” This is the main indicator that signals a change in the evolution of world trade, two or three months before the publication of statistics on the volume of global trade. If the indicator is equal to 100 points, then this means that the expected “trade development” is in line with recent trends. An indicator above 100 points provides reasons to predict an acceleration of the rate of trade expansion, and below 100 – a weakening of that rate.

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