The World Trade Organization's (WTO) Trade Outlook Indicator fell to its lowest level since March 2010 in February as most of the benchmark's components deteriorated simultaneously, suggesting a sharper slowdown in the first quarter of the year if current trade tensions are not resolved.
Specifically, the latest reading of the WTO's leading indicator stood at 96,3 points, compared with 98,6 in its previous published reading, which represents the lowest level since March 2010.
Of the seven factors assessed by the WTO, only the volume of goods for the third quarter of 2018 was above the trend, while the passage of containers through ports remained stable, with a total of 100,3 points.
The data on export orders (100 points), air freight (95,3), automobile production and sales (96,8), electronic components (92,5) and agricultural raw materials (88,7) were below the trend, which is set at 94,3 points, "approaching or exceeding the previous lows since the financial crisis."
"This sustained loss of momentum underscores the urgency of reducing trade tensions, which, together with continued political risks and financial volatility, could herald a broader economic downturn.", warns the international institution, which last September already lowered its forecast for world trade growth to 3,7% in 2019, compared to the 3,9% forecast for 2018 as a result of the escalation of trade tensions and more restrictive credit conditions in the markets.
"These estimates could be revised downwards if trade conditions deteriorate further," the WTO said, adding that greater certainty and improved policies could instead lead to a rapid rebound in trade growth.
Source: Reuters
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