China and the USA Support Mild Recovery of Global Trade

Global merchandise trade has slightly increased in the third quarter, thanks to stronger economic growth in the USA and China, which compensated for stagnation in the European Union, the World Trade Organization (WTO) estimated on Monday.

The trade barometer was 1.6 points higher in September than in June, reaching 100.7 points, exceeding the baseline value of 100 points that indicates trade growth in line with the trend, the WTO reported on Monday.

– This suggests that trade volume will gradually return to the medium-term trend in the second half, although uncertainty remains pronounced due to mixed economic data and rising geopolitical tensions – they claim.

Values below 100 points signal slower growth of merchandise trade compared to the trend in the previous period. The WTO envisioned the barometer as an indicator that should detect a possible turnaround.

The volume of merchandise trade nearly stagnated in the second quarter, with a growth rate of 0.2 percent compared to the previous three months. Compared to the same period last year, it still shows a decline of 0.5 percent, they emphasize at the WTO.

– Trade statistics for the third quarter are expected to be somewhat stronger due to accelerated GDP growth in the United States and China, while the brake on global demand remains stagnation in the European Union – they believe at the WTO.

In the fourth quarter, the growth of merchandise trade is likely to be stronger on a year-on-year basis due to a low comparative base at the end of 2022 when leading economies were hindered by high energy prices, raised interest rates, and pandemic-related disruptions, they forecast at the WTO.

They confirmed the October estimate of a 0.8 percent increase in global trade volume this year, warning, however, of heightened risks due to the situation in the Middle East.

In the second quarter, the strongest increases were recorded in the indices of automobile sales and production and electronic component trade. The indices of air transport, export orders, and maritime transport signal trade in line with the trend, while the index of raw material trade shows slight weakening.

The strong growth of the indices for automotive products and electronic components can be explained by the strengthening global demand for electric vehicles, while the weak growth of raw material trade potentially reflects a decline in the real estate market due to persistently high interest rates.