Global trade in goods may bounce back in the first quarter of 2024, following a weak performance in 2023, and show modest gains but geopolitical tensions continue to pose a risk in the near-term outlook, according to the latest WTO Goods Trade Barometer issued on Friday.

“The current reading of 100.6 for the barometer index is above the quarterly trade volume index but only slightly above the baseline value of 100 for both indices. This suggests that merchandise trade should continue to recover gradually in the early months of 2024, but any gains could be easily derailed by regional conflicts and geopolitical tensions,” per a statement on the barometer.

The Goods Trade Barometer provides real-time information on the trajectory of merchandise trade relative to recent trends. Barometer values greater than 100 are associated with above-trend trade volumes while barometer values less than 100 suggest that goods trade has either fallen below trend or will do so in the near future.

The barometer’s component indices are mostly neutral, with indicators of export orders (101.7) and air freight (102.3) rising slightly above trend while measures of container shipping (98.6) and raw materials trade (99.1) remaining slightly below trend.

The index of automobile production and sales (106.3) was well above trend, although it lost momentum recently. There was also a reversal of the seemingly sharp rebound in electronic components trade (95.6) in the previous barometer.

The volume of world merchandise trade fell 0.4 per cent in the third quarter of 2023 compared to the previous quarter and was down 2.5 per cent compared to the same period in 2022, the barometer pointed out. 

“The steep year-on-year drop in the third quarter was mostly due to relatively strong growth in the first three quarters of 2022. Goods trade from January to October in 2023 has been mostly flat, with volume in the third quarter nearly unchanged since the start of the year and up just 3.2 per cent over two years,” it said.

These developments are more negative than the WTO’s most recent forecast of  October 5 2023, which predicted 0.8 per cent growth in merchandise trade in 2023.

“Goods trade is expected to pick up in 2024 as it rebounds from below-average growth in 2023, but uncertainty remains high due to the prevalence of downside risks,” it noted.