OECD forecasts slower world trade growth for 2023

Global trade experienced a slowdown in April, reversing the significant gains observed in the previous month. This reversal can be attributed to multiple factors, including a surge in exports from China following the lifting of COVID-19 restrictions and weak demand in a sluggish global economy.

According to an index of merchandise trade flows developed by “The Wall Street Journal,” published recently, there was a 3.5% decline in world trade compared to March.

The decrease in global trade reflects the normalization of trade patterns after China decided to end the “Covid zero” policy, which stimulated the country’s exports and alleviated supply bottlenecks that had been impeding trade in other sectors of the economy.

As this momentum fades, economists anticipate that trade flows will continue to be lackluster in upcoming months, primarily due to rising borrowing costs, likely dampening demand from households and businesses.

The OECD recently stated that it projects a modest 1.6% growth in world trade this year, significantly slower than the 5% increase recorded in 2022.

Furthermore, trade flows also experienced a year-on-year decline of 1.6%, further emphasizing the challenges faced by global trade.

Source: Valor Econômico

To read the original news piece, go to: https://valor.globo.com/mundo/noticia/2023/06/16/fluxo-do-comrcio-global-diminuiu-em-abril.ghtml

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