WTO says goods trade slowing due to supply issues, cooler demand

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GENEVA (Businesshala) – Global goods trade is slowing after a sharp rebound after the initial shock of the COVID-19 pandemic due to production and supply disruptions and slashed demand, the World Trade Organization said on Monday.

FILE PHOTO: Containers are seen at the Yangshan deep-water port in Shanghai, China October 19, 2020. Businesshala/Allie Song/File photo

The World Trade Organization said its goods trade barometer fell to 99.5 points near its baseline of 100 in November after a record reading of 110.4 in August.

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The Geneva-based trade body said supply shocks including port gridlock triggered by rising import demand in the first half of the year and disruption in production of goods such as automobiles and semiconductors had contributed to the decline.

Demand for merchandise was also easing, indicated by a decline in export orders.

“Cooled import demand may help ease port congestion, but as long as container throughput remains at or near record levels, it is unlikely to eliminate backlogs and delays,” the WTO said.

The WTO said the reading was broadly in line with forecasts for a 10.8 per cent pick-up to trade volume this year, slowing to 4.7% growth in 2022.

The WTO said the outlook for world trade is being weighed down by downside risks, regional inequalities and continued weakness in services trade.

The Geneva-based trade body said all of its barometer component indices declined, with its automotive products index falling the most and only the Air Freight index rising strongly.

Electronic components, container shipping and raw materials were at or near the 100 mark, indicating growth in line with medium-term trends.

The WTO goods trade barometer is an aggregate of data and is designed to forecast turning points and gauge momentum in global trade growth, rather than providing a specific short-term forecast.

Reporting by Philip Blenkinsop; Editing by Chizu Nomiyama

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