World trade slows down as UK retail sales fall

Global trade growth is slowing down due to weakening export orders and demand for container shipments and air freight further retreats.

The goods barometer calculated by the World Trade Organization sank below its trend levels, in another signal that the global economy is weakening. It has slipped to 96.2, down from 100.0, reflecting cooling demand for traded goods.

The WTO fears that trade growth is likely to slow in the closing months of 2022 and into 2023, as the global economy continues to be buffeted by strong headwinds.

The WTO global trade barometer report found falling export orders, and weaker demand for air freight and electronic components.

World merchandise trade volume growth continued to slow in the second quarter of 2022, with a 4.7% year‐on‐year increase similar to the 4.8% rise in the first quarter.

According to the WTO’s latest forecast, world trade is expected to decelerate further in the second half of 2022 and remain subdued in 2023 due to several related shocks, including the war in Ukraine, high energy prices, inflation, and monetary tightening in major economies.

Asia-Pacific markets have dropped as anti-Covid lockdown protests broke out at dozens of Chinese cities last weekend.

The demonstrations, as Covid-19 infections rise at record pace, have fuelled fears that China’s economic recovery could stumble.

Oil has hit its lowest level since January, while China’s yuan fell to a two-week low, as investor anxiety rose.

UK retailers have reported a drop in sales this month, and warned that December will be weak too, as the ‘cost of living’ crisis hits the sector.