BRUSSELS (Reuters), – The global trade bottlenecks that are causing problems in international trade are more due to demand surges than supply chains snags. However, pressure is expected to decrease over the coming months according the chief economist of the World Trade Organization.

According to the WTO, October saw a decrease in demand for goods. This was however before Omicron’s coronavirus caused curbs to activity. It also led to the postponement and cancellation of WTO ministerial meetings.

Robert Koopman is the chief economist. He stated that customers continued to spend more on goods than they did services, because they couldn’t or didn’t want to travel or eat out.

Koopman stated that, for goods trade excess demand probably explained between two-thirds and three-quarters apparent shortages.

According to Reuters, “It remains that this compositional shift has been supported by appropriate aggressive, quick fiscal, and monetary policies has resulted this outcome where many people talk about supply-chain disturbances.”

According to him, supply disruptions are more apparent in the automobile sector than for shippers who have to adjust to a shift of production from China into countries such as Vietnam, Malaysia and Indonesia.

Koopman indicated that U.S. key indicators, such as prices and back-ups for vessels at ports and used car prices were dropping and that U.S. throughput had picked up.

He stated, “I am pretty certain that within the next three or patru months we will see the inflationary pressures decreasing,” and was referring to the vast majority of tradeable goods.

However, some companies warn that the trade channel has become so jammed up they may not see normal business returns until next year.

WTO in March will invite governments, businesses, and trade experts to the table to talk about global supply chains issues. Koopman indicated that, even though problems had eased, there were still many lessons to be learned.

“What we observed were very quick fiscal and monetary responses. He said that long-term, finely calibrated supply chain did not have the regulatory or physical infrastructure necessary to quickly adapt.