Global trade recovery from coronavirus shock may have ‘peaked’, as WTO says outlook ‘overshadowed by downside risks’
- The World Trade Organization’s goods trade barometer hit 110.4 in its latest reading, the highest point since the quarterly indicator was first introduced in 2016
- But the trade body says momentum may be peaking and the outlook for world trade continues to be overshadowed by downside risks, including Covid-19
A strong recovery in global merchandise trade from the shock of the coronavirus pandemic in 2020 may have peaked and its impending deceleration could be worsened by new virus outbreaks across the world, the World Trade Organization (WTO) said.
The WTO’s goods trade barometer hit 110.4 in its latest reading, the highest figure since the quarterly indicator was first released in 2016, and up more than 20 points compared to the same time last year.
The latest reading contrasts sharply to the index published in May last year, which plunged to a record low of 87.6. Even so, the global trade body said on Wednesday the “index has started to rise at a decreasing rate, which could presage a peaking of upwards momentum in trade”.
The barometer – which is based on key economic indicators such as global export orders, the trade in electronic components and agricultural raw materials – is designed to signal current and near-term developments in world merchandise trade.
Covid-19 continues to pose the greatest threat to the outlook for trade, as new waves of infection could easily undermine the recovery
In the latest reading, indicators such as air freight, container shipping and raw materials were rising, but the forward-looking new export orders index “has slowed more definitively”, the WTO said.
“The rise in the barometer reflects both the strength of current trade expansion and the depth of the pandemic-induced shock in 2020,” the WTO said.
“The outlook for world trade continues to be overshadowed by downside risks, including regional disparities, continued weakness in services trade, and lagging vaccination timetables, particularly in poor countries.