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Trade expansion will likely be further delayed in Q2 2018

Trade expansion

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Trade expansion will likely be further delayed in the third quarter of 2018, according to the forecast World Trade Outlook Indicator (WTOI) published by the World Trade Organization (WTO). For the next three months, the indicator measures a value of 100.3 points – below the previous estimate of 101.8 points and slightly above the base value of the index of 100 points.

This is a signal of a slowdown in trade growth over the coming months, in line with medium-term trends. According to the organization, the lack of momentum signals a weakening of some of the components in the indicator, such as orders for export orders, as well as production and sale of cars, which in turn could be seen as a response to the increase in trade pressure.

The results remain the same as the previous WTO forecast from April, which predicted a slowdown in commodity volume growth from 4.7% in 2017 to 4.4% in 2018.

“Increasing trade pressure continues to pose a risk to trade forecasts and will be closely monitored”, says the WTO in text.

The slowdown in the overall index is mainly due to the presentation of some of its sub-indexes and, in particular, of the export orders (which mark 97.2 points), decreasing steadily since the beginning of the year. Another important factor is the production and sale of cars (98.1 points), which have recently increased slightly, but are still lagging behind.

At the same time, the air transport indexes (100.9 points) and the capacity of the merchant ports (102.2 points) remain high, but the peak of their growth momentum seems to have already passed. Above the threshold of 100 points are the electronic components (102.2 points) and the agricultural commodities (100.1 points).