Global Trade Watch
Group Economics Emerging Markets Research
09 November 2015
Should we worry about global trade?
Arjen van Dijkhuizen
• Global trade growth disappoints
Senior Economist
In recent years, world trade growth has been relatively subdued. This year, world trade has
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weakened further. After a weak start of the year, CPB trade data and the Baltic dry index
arjen.van.dijkhuizen @nl.abnamro.com
indicate that global trade has shown a rebound in June. However, the latest data show a renewed weakening in the summer months. Should we be concerned?
• Is the historical relationship between world trade and growth broken? World trade typically outperforms global growth, but is also more cyclical. Over the past few years, global trade growth has been lower than global growth. Still, we think it is too early to say that the historical relationship has been broken. We expect global growth to pick-up moderately next year, and that global trade will follow.
• Emerging markets lead the slowdown in export volume growth The slowdown in global exports this year is driven by emerging markets, particularly emerging Asia. Still, according to CPB’s momentum indicator, emerging markets also lead the recent recovery, with emerging Asia again as key driver.
• Broad-based US export slowdown highlights impact strong US dollar US export values have fallen not only to emerging markets, but also to other advanced economies (Japan, eurozone). This shows that not only weaker domestic demand (EMs), but also currency depreciation versus the strong US dollar (EMs, Japan, Europe) is playing a clear role. •
Growth of import volumes falls to post global crisis lows In the first eight months of this year, import volumes have slowed to the lowest level since the global financial crisis. This is driven by EMs (particularly CEE and MENA), but also Japanese imports have weakened considerably. After falling sharply in early 2015, also driven by a sharp drop in import (including commodity) prices, China’s import values have shown some rebound since. China’s import volumes have fallen less dramatically.
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