WTO Suggests Bearish World Trade Growth in 2019

GENEVA, SWITZERLAND – World merchandise trade is expected to remain below trend into the fourth quarter of 2019, according to the WTO’s latest Goods Trade Barometer. The indicator’s reading of 96.6 marks a slight improvement compared to the 95.7 registered in August, but it remains well below the index’s baseline value of 100, signaling below-average growth. Some components of the barometer have stabilized since the last reading in August, while others remain on a downward trajectory reflecting heightened trade tensions and rising tariffs in key sectors. Indices for export orders (97.5), automotive products (99.8), and container shipping (100.8) have firmed up into on-trend territory. However, the indices for international air freight (93.0), electronic components (88.2), and raw materials (91.4) have all deteriorated further below trend. Electronic components trade was weakest of all, possibly reflecting recent tariff hikes affecting the sector. In September, WTO economists downgraded their trade growth expectations for 2019 to 1.2 percent, down from the 2.6 percent forecast in April. They attributed this substantial deceleration to slowing economic growth, increased tariffs, Brexit-related uncertainty, and the shifting monetary policy stance in developed economies.