WTO notes pessimistic sentiments in global export


08/10/2018

Trade restrictions have already had a negative impact on the dynamics of world trade. Its growth in volumes may further slowdown in the third quarter of this year, according to the World Trade Organization (WTO) leading index. In July 2018, its value dropped to 100.3 points against 101.8 points in April. The value of 100 points is equivalent to growth in accordance with medium-term expectations, whereas higher values indicate wider expansion of trade rates. In the first quarter, the index line was below the actual growth in turnover, which also indicates a slowdown in growth, the WTO notes.



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The main decrease in the index happened due to a reduction in the export orders (97.2 points), falling from the beginning of the year, as well as a decrease in the production and sales of cars (indicators that quickly react to the escalation of trade disputes). Turnover through container ports continued to expand (102.2 points), however it has already passed its peak growth, the WTO says. The subindex of sales of electronic components remains high (102.2 points), and the index of trade in agricultural raw materials returned to the trend line (100.1 points).

Recall that in the first quarter, world exports in monetary terms increased year on year by 14%, to $ 4.7 trillion, which was the highest increase since the end of 2011. In physical volumes, the increase was 3.7%, which was lower than the same period of January-March 2017 (plus 4.8%), when exports only began to recover.

According to the WTO forecast, by the end of the year the volume of trade will grow by 4.4% against 4.7% in 2017, and in 2019 will slow to 4% (calculated as the average rate of increase in imports and exports). At the same time, the WTO also points to the risks of a slower growth in supply in the event of a deterioration in business activity. So far, according to the data of the Chinese Ministry of Trade, even the largest round of restrictions (by $ 34 billion, introduced on July 6 at the same time by the US and China) had little effect on mutual supplies: exports from China to the US in July fell by 2.5% (month-to-month) while for the year the growth was 19%. Imports of US goods, in turn, fell by 1.5% (year-on-year, plus 16%).

source: wto.org