There was the fastest decline in world trade in the last three years.

Demand for exports of goods is weakening due to high inflation, tariff increases and spending on services. Global trade volume fell in July at its fastest pace in almost three years.

Trade volumes decreased by 3.2 percent in July compared to the same month last year. This was the steepest drop since the early months of the coronavirus pandemic in August 2020.

WEAKNESS CONTINUES IN GIANT ECONOMIES

The drop followed a 2.4 percent contraction in June, adding to evidence that global growth is slowing, according to World Trade Monitor data published by the Dutch Bureau for Economic Policy Analysis (CPB). .

Demand for global exports of goods, which boomed during the pandemic, weakened due to reasons such as high inflation and rising interest rates by global central banks in 2022.

While there was a 1.5 percent annual decline in China, the world’s largest goods exporter, there was a 2.5 percent contraction in the eurozone and 0.6 percent in the United States.

PRESSURE WILL CONTINUE ON GLOBAL TRADE

While rates are not expected to rise further in the coming months, central banks are unlikely to reduce borrowing costs until more evidence emerges that underlying price pressures are under control.

Analysts believe that the lack of credit expansion will continue to put pressure on exports.

“It could be several months before global trade bottoms out, and the lagging effect of higher interest rates will likely further weigh on demand for certain goods,” said Ariane Curtis, an economist at consultancy Capital Economics.

Trade is likely to follow the trend of global economic growth, said Mohit Kumar, an economist at financial services firm Jefferies. Kumar predicted “a slowdown in all major economies in the coming quarters.”