Global Trade Struggles to Bounce Back from 2023 Slump, WTO Says

(Bloomberg) —

Global merchandise trade is struggling to accelerate from a slump last year amid signs that growth in the automotive industry is softening, the World Trade Organization said.

The WTO’s goods barometer was little changed at 100.6 compared with a late-November reading of 100.7, the Geneva-based organization said in a report Friday. The baseline of 100 indicates growth over the next quarter that’s in line with medium-term trends. 

“This suggests that merchandise trade should continue to recover gradually in the early months of 2024, but any gains could be easily derailed by regional conflicts and geopolitical tensions,” according to the report posted on the WTO’s website.

While export orders and air freight volumes are showing signs of above-trend growth, other areas including container shipping and raw materials are lagging, the WTO said. 

An index of auto production and sales also remains well above trend, it said, “although it has lost momentum recently.” In addition, “a seemingly sharp rebound in electronic components trade in the previous barometer has been revised away,” the WTO said.

Last week, WTO Director-General Ngozi Okonjo-Iweala said merchandise trade volumes for 2023 likely fell short of the organization’s October forecast for 0.8% growth. She also said its prediction for a 3.3% gain in global trade this year may prove to be too optimistic.

The WTO is working on updating those projections, she told attendees of the organization’s 13th ministerial conference, held in Abu Dhabi.

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