"The three months average growth (“momentum”, the preferred measure of trade growth due to less volatility) was 0.7% in December (non-annualized), down from 0.8% in November.
2015 was an unusual year for world trade. Global trade increased by 2.5% in volume terms, sharply down from 3.2% in 2014. Such a sharp slowdown in world trade growth is usually accompanied by a slump in global GDP growth, but this was not the case in 2015. Most of the trade pain was felt in the first half of the year: in the period January-May 2015, trade volumes declined every month, due to a combination of slowing GDP growth in emerging economies, uneven recovery in developed countries, rising geopolitical tensions, sharp exchange rate fluctuations, and collapsing commodity prices.
Because we expect that world trade will not go through a period of decline this year, as it did in 1H15, we expect annual growth for 2016 to be slightly better than 2015. Having said this, downside risks have increased. Industrial production growth in the Eurozone, which correlates strongly with import demand, appears dead in the water. The picture painted by PMIs is hardly better.
In China, trade flows had, after weakening markedly in early 2015, begun a slight recovery in volume terms. With Chinese credit growth strong and policy support building up, we expect this trend to continue into 2016. However, January trade figures turned out more gloomy than expected. In the US the performance of industry is still pretty weak. For commodity exporting countries, rock bottom prices continue to put downward pressure on domestic GDP, reducing their import potential in the year ahead.
All in all, while we do not expect the unusually weak trade growth of 2015 to be repeated in 2016, it is also difficult to envisage a more than modest acceleration of world trade."
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