WTO Sees Trade Rebound, But Likely Year-end Slowdown
The World Trade Organization said on Friday global trade in goods had rebounded in the third quarter from COVID-19 lockdowns, but predicted a slowdown at the end of 2020.
The WTO said its goods trade barometer had risen to 100.7 points from a record low of 84.5 points in August, driven by a surge in export orders. A reading greater than 100 indicates above-trend growth.
“The latest reading indicates a strong rebound in trade in the third quarter as lockdowns were eased, but growth is likely to slow in the fourth quarter as pent-up demand is exhausted and inventory restocking is completed,” the WTO said.
The WTO said the outlook for trade was uncertain, with a second wave of COVID-19 infections leading to renewed lockdowns in Europe and North America that could trigger another round of business closures.
The WTO goods trade barometer is a composite of data, with indices on export orders and agricultural raw-material trade above medium-term trends, container shipping and automotive goods at trend and air freight and electronic components trade below.
The barometer is designed to anticipate turning points and gauge momentum in global trade growth within a few months, although the WTO said uncertainty meant it may be less reliable.
It cited higher-frequency data pointing to a stalled recovery of international flights and container shipping in October, but improved economic sentiment reflected by prices of copper futures and analysis of news reports. The latter showed an improvement in tone following announcements on effective vaccines in early November.
(Reporting by Philip Blenkinsop; editing by Emma Farge, Larry King)