Q2 2023 Sees Trade Rebound Fueled by Autos, Yet Weak Exports Could Restrain Q3 Growth, WTO Reports.
Merchandise Trade Volume
The current reading of 99.1 for the barometer index is up from the previous reading of 95.6 from last May and close to the baseline value of 100. Merchandise trade rebounded in Q2 after 2 quarters of decline but remains slightly below trend.
Uncertainty looms for Q3 recovery if export orders stay weak per the barometer’s PMI-based component. Values above 100 signal strong trade, while values below 100 indicate a weaker trajectory.
Merchandise trade volume declined by 1.0% YoY and 0.3% QoQ in Q1 2023 due to factors like geopolitical tensions and monetary policies. Sluggish global demand, particularly in the EU and China, hindered imports, slightly deviating from the WTO’s earlier projection.
Challenges in Q1 2023
A rebound in the second half of 2023 could still achieve the 1.7% trade growth target.
Most component indices of the barometer show slightly below-trend readings, including export orders, container shipping, air freight, and raw materials.
Exceptions are the automotive products index, surpassing trend at 110.8, and the electronic components index, below trend at 91.5. Japan’s robust GDP growth owes to surging vehicle exports, while China finds strength in vehicle exports amid sluggish momentum.
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