General

Yesterday, the WTO released the latest phase of the Trade in Goods Barometer, which read 110.4. This is the highest record since the WTO launched this index in July 2016. The chart shows that the growth rate of this index has shown a downward trend, indicating that the momentum of trade growth may have reached the highest value.

All the component indexes of the goods trade barometer were higher than expected, indicating that goods trade in various industries generally recovered. Among the various component indexes, the largest increases were air freight (114.0), container transportation (110.8) and raw materials (104.7).

The auto product index (106.6) is also rising, although auto production and sales in some countries declined in July due to the shortage of semiconductors. This shortage is also reflected in the slight decline in the electronic component index (112.4). The forward-looking new export order index (109.3) has slowed down again, further indicating that the pace of recovery may slow down in the short term.

The increase in the air transport index reflects a rebound in air transport due to the relaxation of travel restrictions related to the pandemic in some countries (mainly developed countries). If the spread of COVID-19 mutant strains forces a re-implementation of restrictions, the index may suddenly decline again.

The latest barometer readings are broadly consistent with the latest WTO trade forecast on March 31, which predicts that world merchandise trade will increase by 8% in 2021 after a 5.3% decline in 2020.

Since the second quarter of last year, global trade has grown steadily. In the first quarter of this year, merchandise trade increased by 5.7% year-on-year. According to the Barometer Index of Trade in Goods, the WTO expects that the increase in trade in goods in the second quarter will increase year-on-year. At the same time, the new crown pneumonia remains the biggest threat to the prospects of global trade, and the new epidemic may easily disrupt the trade recovery.

The WTO Barometer of Trade in Goods collects statistics on trade in goods to provide early signals on the current trends and inflection points of world trade in goods. The readings are updated quarterly and released in conjunction with the service trade barometer. When this value exceeds 100, it indicates that the growth of global trade in goods is higher than expected, and if it is lower than 100, it indicates that it is lower than expected.