News
Trade growth is likely to slow further into the fourth quarter of 2018, according to the World Trade Organization's recent World Trade Outlook Indicator (WTOI) released last week. The most recent WTOI reading of 98.6 is the lowest since October 2016 and reflects declines in all component indices.
It is below the previous value of 100.3 and falls under the baseline value of 100 for the index, signaling that trade growth in the coming months is expected to be below-trend.
The continued moderation in the overall WTOI index was driven by the steady decline in the export orders index (96.6), which remains below trend and is approaching the weakest point recorded in 2012 during the eurozone crisis. (Readings of 100 indicate growth in line with medium-term trends; readings greater than 100 suggest above-trend growth, while those below 100 indicate the reverse.)
Indices for automobile production and sales (96.9), electronic components (93.9), and agricultural raw materials (97.2) have meanwhile moved from on trend to below trend. International air freight (100.0) and container port throughput (101.2) have dipped but remain on trend.
The latest results are consistent with the WTO's downgraded outlook for global trade issued in September amid escalating trade tensions and tighter credit conditions in important markets. The revised forecast anticipated trade expansion to slow to 3.9% in 2018 and 3.7% in 2019 from 4.7% in 2017.
