ISTANBUL, June 2 (Bernama-Anadolu): 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.
Anadolu reported that 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 per cent 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 per cent this year, significantly down from 5.5 per cent last year.
It also estimates global economic growth to come in at 2 per cent in 2023, down from 2.7 per cent in 2022.
"Trade growth seems unlikely to outpace GDP in the medium term, as globalisation stalls," it noted. - Bernama-Anadolu