Supply chain disruptions and rising Covid-19 cases reduced the volume of global merchandise trade by 0.8% in the third quarter, ending a 12-month run of solid expansion, according to a report Monday from the World Trade Organization.
The Geneva-based WTO said North American and European imports were weaker than expected, and exports from both regions declined. Now the omicron variant of the Covid-19 virus has “tipped the balance of risks towards the downside” the WTO said.
The news comes as the spread of the highly infectious Omicron variant is forcing some of Europe’s largest economies to impose lockdowns and travel restrictions to curb infections. Europe, which represents more than 35% of world merchandise trade, has the highest case count of any region.
Seasonally adjusted exports fell 1.9% in North America and dropped 1% in Europe from the previous quarter. Third-quarter imports declined by 0.5% in Europe and rose 0.4% in North America. The WTO previously expected merchandise trade to grow 2.6% in Europe and 1.5% in North America for the three months through September.
Trade volume was still up 11.9% year to date through September — down slightly from the WTO’s October prediction of a 12.7% rise over the same period.
“The forecast of a 10.8% increase in merchandise trade for the whole of 2021 could still be realized if fourth quarter data show a pickup in volume growth,” the WTO said. “This is a real possibility since measures to unblock container ports on the west coast of the United States have met with some success.”
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Expectations of positive growth in the country’s exports are also backed up by the outlook of the World Trade Organisation (WTO) which predicts a 4.7 per cent expansion in the global merchandise trade volume in 2022.