TRADE INDICATOR
The World Trade Outlook Indicator suggests that world merchandise trade may rebound in the second quarter
Photo by: Reuters
The World Trade Organisation (WTO) has launched a new World Trade Outlook Indicator (WTOI), which is designed to provide real-time information on global trade trends.
The WTOI was unveiled in Shanghai, China, this month, ahead of the Group of 20 (G20) Trade Ministers meeting.
Combining a variety of trade-related indices, the WTOI is designed to provide an early signal of the current direction of world trade and where it is likely to go in the near future. In this way, the WTOI should signal turning points in world merchandise trade volume. It also complements existing tools, such as the WTO’s longer-term trade forecasts and other statistical releases.
To show performance against trend, the WTOI provides a headline figure. A reading of 100 would indicate trade growth in line with recent trends, a reading greater than 100 would suggest above-trend growth, while a reading below 100 indicates below-trend growth. The WTOI will be updated on a quarterly basis.
“In serving as a quarterly signal of current and short-term trade conditions, the WTOI responds to strong interest from policymakers and the business community for more immediate, real-time information on trade and trading conditions,” WTO director-general Roberto Azevêdo said.
For the current period, the WTOI came in slightly below trend – with a reading of 99.0 – and with a downward tendency in the most recent data.
Azevêdo noted that, while the WTOI should provide an early signal if trade was likely to slow or accelerate in the near future, it suggested that trade growth would remain weak into the third quarter of 2016.
The reading was slightly more positive than that for merchandise trade, which declined in the first quarter of 2016, as noted in the WTO’s quarterly trade statistics released last month.
The WTOI, therefore, suggests that world merchandise trade may rebound in the second quarter, but that the underlying weakness will persist into the third quarter.
Meanwhile, components of the WTOI indicate a mixed outlook – while export orders in leading traders have rebounded above trend and continue to pick up, air freight data from the International Air Transport Association and container throughput data from major seaports remain weak, but show signs of stabilising.