(MENAFN- AzerNews) World trade is slowing sharply due to monetary tightening by
central banks, fading fiscal support by governments, and weak
demand for consumer goods, Fitch Ratings said Thursday in a report,
Azernews reports, citing Anadolu Agency.
Despite a strong recovery in the post-pandemic period in 2021
and 2022, the volume of global goods trade is now falling, said the
rating agency.
This is partially offset by a recovery in services trade, such
as tourism and transportation, but services represent only 22% of
total trade and fail to fully support growth in total trade, it
added.
"Supply-chain bottlenecks are no longer a key constraint on
trade flows. The recent slowdown in trade now seems more a
reflection of slowing demand," the report said.
"US and global demand for consumer goods is weakening, which
reflects the phase-out of US consumer-focused fiscal stimulus,
monetary tightening and the rebalancing of demand back towards
services after the lifting of Covid-19 restrictions," it added.
The rating agency said it expects global trade to grow 1.9% this
year, significantly down from 5.5% last year.
It also estimates global economic growth to come in at 2% in
2023, down from 2.7% in 2022.
"Trade growth seems unlikely to outpace GDP in the medium term,
as globalisation stalls," it noted.
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