World trade falls 0.8% after four quarters of expansion

The volume of world merchandise trade fell 0.8% in the third quarter of 2021, after four consecutive quarters of strong expansion, the World Trade Organization (OMC).

The decline was mainly due to disruptions in supply chains, shortages of production inputs, and increased production inputs. Covid-19 cases that hampered the growth of trade.

Despite strong headwinds that contributed to the decline in the third quarter, trade volume still increased 11.9% year-to-date through September.

This is slightly worse than the most recent WTO trade forecast of October 4, which called for a 12.7% increase over the same period.

But, according to the WTO, the forecast for a 10.8% increase in merchandise trade for the full year of 2021 could still be fulfilled if data for the fourth quarter shows a rebound in volume growth.

“This is a real possibility as measures to unblock container ports on the west coast of the United States have had some success,” the WTO said in a statement.

Furthermore, even though the Merchandise Trade Barometer of the WTO has indicated a cooling of the growth of trade in the last months of 2021, it is still in trend.

However, the emergence of the Omicron variant of SARS-CoV-2 appears to have tipped the balance of risks down, increasing the possibility of a more negative outcome.

In contrast to volume, the value of world merchandise trade continued to rise in the third quarter as export and import prices rose sharply.

World trade, measured by average exports and imports, increased 24% year-on-year in the third quarter in nominal US dollar terms.

This growth is weaker than the 46% jump in the second quarter, but stronger than the 15% increase in the first quarter.

Trading values ​​were driven by raw materials, including fuels, the prices of which more than doubled between the third quarter of 2020 and the third quarter of 2021.

According to IMF statistics, fuel prices They fell in November after peaking in October, but were still up 137% year-on-year.

Meanwhile, the food prices they were up 23% and base metals were up 13% from the previous year. The prices of many manufactured goods have also risen, driving up measured inflation in many economies.



Reference-www.eleconomista.com.mx

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