TWN Info Service on WTO and Trade Issues (Jun22/28)
27 June 2022
Third World Network

Trade: Services trade continues to recover despite Ukraine conflict
Published in SUNS #9603 dated 27 June 2022

Geneva, 24 Jun (Kanaga Raja) -- World services trade continued to grow into the second quarter of 2022, indicating its resilience to the conflict in Ukraine and signaling a possible shift in consumption patterns away from goods and back toward services following the easing of the COVID-19 pandemic, the World Trade Organization (WTO) has said.

According to information posted on its website, the WTO said its Services Trade Barometer has risen firmly above trend to 105.5, over the baseline value of 100 for the index and up from the previous reading of 102.5 in September 2021.

"The upturn suggests that services trade will continue to post gains in the second quarter once official statistics for this period become available," it said.

According to the WTO, its Services Trade Barometer is outpacing its Goods Trade Barometer, indicating resilience of services trade to the conflict in Ukraine and signaling a possible shift in consumption patterns away from goods and back toward services as the COVID-19 pandemic eases.

[Earlier in May, the WTO released its Goods Trade Barometer in which it said that the conflict in Ukraine and the recent pandemic-related lockdowns in China appear to be dampening global goods trade in the first half of 2022.  The latest reading of 99.0 stayed below the baseline value of 100 for the index, suggesting continued weakness in world trade, it said.]

Referring to the Global Services Trade Activity Index, which provides an approximate measure of the real volume of world services trade, accounting for changes in prices and exchange rates, the WTO said the volume of services trade has risen slowly but steadily since bottoming out in the second quarter of 2020 in the early stages of the global pandemic.

The index continued to move towards recovery in the fourth quarter of 2021 with a 15.6% year-on-year increase, although it remained 8.9% below its pre-pandemic peak in the second quarter of 2019, it added.

The WTO said among the Services Trade Barometer's component indices, the passenger air transport index (117.1) registered the strongest gain, contributing to the above trend reading in the global index.

It said strong showings in the services Purchasing Managers' Index (105.1) and information and communication technology (ICT) services (104.2) also helped lift the services barometer into expansion territory.

The WTO said while it remains above trend, the financial services index (101.7) appears to have lost momentum recently, possibly due to sanctions on the Russian Federation in connection with the conflict in Ukraine.

Other indices including container shipping (101.5) and construction (101.1) remain slightly above trend, said the WTO. +