[Asia Economy Reporter Park Byung-hee] The World Trade Organization (WTO) goods trade index, which serves as a leading indicator of global trade growth, has fallen below the baseline of 100. A value below 100 indicates that trade growth is expected to slow down.
According to major foreign media on the 28th (local time), the WTO announced that the goods trade index recorded 96.2, down from the 100 announced in August.
This is interpreted as reflecting the contraction in trade demand due to the Ukraine war and interest rate hikes by various countries.
The WTO analyzed that the decline in the goods trade index supports the view that the global trade growth rate will slow down through next year.
The goods trade index quantifies global trade prospects; values below the baseline of 100 indicate weaker growth, while values above 100 indicate stronger growth. A decline in the goods trade index is understood as a contraction in trade demand.
The WTO had already downgraded its forecast for global goods trade volume growth next year in its October report. It significantly lowered the 2023 global trade growth forecast from 3.4%, presented in April this year, to 1%.
Breaking down the current goods trade index by sector, major items such as export orders (91.7), air freight (93.3), electronic components (91.0), raw materials (97.6), and container shipping (99.3) all fell below the baseline.
However, the automotive sector (103.8) exceeded the baseline, supported by improved supply conditions, strong U.S. car sales, and increased exports from Japan.
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