wto: War, China Covid curbs ‘short-circuit’ global goods trade growth: WTO



The conflict in Ukraine and recent pandemic-related lockdowns in China appear to be dampening global goods trade in the first half of 2022, says the latest WTO Goods Trade Barometer. The index is a forward-looking composite of real-time indicators, suggesting continued slow growth in merchandise trade.
WTO’s last outlook in February, before the war started, showed optimism and suggested that trade might have been approaching a turning point, with stronger growth expected in the near future. “The anticipated upturn may have been short-circuited by the conflict in Ukraine, which started in late February and triggered sharp rises in food and energy prices, which tend to reduce real incomes and lower economic growth. China’s imposition of major lockdowns to combat a new outbreak of COVID-19 has further disrupted trade and production,” says the new report.
The report says most of the barometer’s component indices are close to or above their baseline value of 100, for example export orders (101.2), automotive products (101.5), air freight (99.9), electronic components (103.8), and raw materials (99.5). Only container shipping remains firmly below trend (95.0).
In April, the WTO forecasted 3.0% growth in the volume of world merchandise trade in 2022, down from the 4.7% growth predicted as of last October. The current barometer reading is broadly consistent with the April projection, but forecasts are less certain at the moment and should be interpreted with care.
According to the index, readings of 100 indicate growth in line with medium-term trends; values greater than 100 suggest above-trend growth while values below 100 indicate the reverse.
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