Statsguru: Six charts show mounting trade troubles amid uncertain outlook

WTO also revised global growth figures downwards. It now expects the world to register a 2.3 per cent growth, compared to the April estimate of 3.2 per cent for 2023

The latest estimates from the World Trade Organization (WTO) suggest that growth in global merchandise trade in 2023 would dip to 1 per cent from 3.5 per cent in the current year (chart 1). Earlier, in April, the trade organisation had predicted merchandise trade to expand by 3.4 per cent in 2023. Africa and West Asia may witness a contraction in exports in the coming year. In contrast, the Commonwealth of Independent States, comprising Eastern Europe and Asian countries, will experience the highest growth rate. Northern American countries are expected to record 1.4 per cent trade growth.

WTO also revised global growth figures downwards. It now expects the world to register 2.3 per cent growth, compared with April estimate of 3.2 per cent for 2023. This year, the world economy is expected to register 2.8 per cent gross domestic product growth (chart 2). As recession fears loom in European economies and the US, India’s export growth is also slowing. Although merchandise exports were close to the $200-billion mark for April-September, analysis shows that exports contracted over the past two months.

Exports in September were down 3.5 per cent compared to the previous year, following a 1.1 per cent contraction in August (chart 3). However, services exports have done better till now; they were 15 per cent higher in August than last year (chart 4). But a recession in the US and Europe could impact IT services exports, which constitute a significant proportion of overall service trade. Even with resilient exports, India’s troubles are mounting, as the current account deficit widened to $23.9 billion in Q1 2022-23 —its highest level in five years (chart 5).

Meanwhile, dwindling global growth, trade, and high inflation have forced several international organisations, rating agencies, and domestic institutions to slash India’s growth forecast. The Reserve Bank of India, in its latest monetary policy meeting, reduced India’s growth estimate from 7.2 per cent to 7 per cent for the current financial year. The World Bank slashed India’s forecast by a percentage point to 6.5 per cent.

StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines