World trade takes another beating and heads for worst year since 2009 - ING


Raoul Leering, Head of International Trade Analysis at ING, notes that the global trade in volume terms took another beating in October and is heading for its worst year since the trade collapse in 2009.

Key Quotes

“Due to structural changes and little support from the economic cycle, a turnaround in the short run is unlikely.”

“According to CPB Netherlands Bureau for Policy Analysis world trade in volumes was 1.1% down in October compared to September. The September figure was revised down to -0.5% (initially -0.4%).”

“Global trade is sliding into ever more gloomy territory. Nowadays it not only fails to outpace world GDP growth, it hardly grows at all. During the first ten months of 2016 the monthly average trade flow is only 0.8% higher than last year.”

“The stagnation of trade is largely due to emerging markets (-1% thus far compared to last year). The most negative contribution comes from the Middle East, Latin America and Africa. But the stagnation of imports in emerging Asia plays a large role as well. In 2013, this region accounted for 75% of the increase in global trade, but this year and last year emerging Asia has shown hardly any import demand growth.”

“China is largely responsible for the import slump in emerging Asia. The rebalancing of its economy towards consumption instead of export results in less imports of intermediates, reinforced by the government policy to stimulate the use of domestic suppliers.”

“Not only structural developments in China suppress trade growth. Protectionism and the slowdown of the expansion of global value chains are other factors. Since these developments will not fade overnight, there is little hope for a trade revival in 2017. Since we expect world GDP growth to accelerate only modestly next year (from 2.4% to to 2.9%), the economic cycle will not cause a turnaround in trade growth either.”

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD clings to daily gains above 1.0650

EUR/USD clings to daily gains above 1.0650

EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.

EUR/USD News

GBP/USD recovers toward 1.2450 after UK Retail Sales data

GBP/USD recovers toward 1.2450 after UK Retail Sales data

GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.

GBP/USD News

Gold holds steady at around $2,380 following earlier spike

Gold holds steady at around $2,380 following earlier spike

Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.

Gold News

Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium

Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in

Bitcoin price shows no signs of directional bias while it holds above  $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research. 

Read more

Week ahead – US GDP and BoJ decision on top of next week’s agenda

Week ahead – US GDP and BoJ decision on top of next week’s agenda

US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.

Read more

Forex MAJORS

Cryptocurrencies

Signatures