Global Trade Growth Slows Down To 3.3% In 2018


Tuesday, February 26, 2019  02:24 PM / by Timme Spakman*, ING Bank


According to Statistics Netherlands, world trade growth slowed in 2018 to 3.3% compared to 4.7% growth in 2017. Is the trade war to blame? 

After a decline of 1.8% in November 2018, world trade nosedived to 1.7% in December 2018.  

In 2018, world trade growth slowed down to 3.3% compared to 4.7% growth in 2017. The ongoing tit-for-tat trade war is the first thing that comes to mind as the cause of this slowdown, but due to the recent government shutdown, we don't have US import figures for December just yet. However, figures for October and November are significantly below September levels, and this may very well be the result of elevated US tariffs. 

Although for the world as a whole, the direct effects of the tariffs seem to have been limited on the aggregate level, because most of the tariffs only kicked in during 2H18, but indirect effects such as declining business confidence are suppressing world trade. 

The cooling down of the world economy and underlying changes in world trade also caused slower trade growth. Firstly, emerging economies, like China, are transitioning away from export and investment-driven growth towards domestic consumption. Secondly, growth in global value chains has decreased in recent years and thirdly, China’s contribution to world trade (historically about 1.5 percentage point) has been falling as it pursues a strategy of self-sufficiency.

*Timme Spakman  is the Economist, International Trade Analysis, ING Bank N.V.

Proshare Nigeria Pvt. Ltd.

Related News

1.       Eurozone 2019 Growth Forecast Cut to 1%; ECB Could Restart QE

2.      Open-Ended Bond Funds a Potential Risk to Financial Stability - Fitch

3.      Resolving Venezuela's Debt Default to Take Years

4.      Fed's Balance Sheet Still Likely to Shrink Through 2020

5.      Global Government Debt Reaches USD66trn, Driven by Emerging Markets - Fitch

6.      Federal Reserve Issues FOMC Statement Jan 2019

7.      Chinese Economy to Experience a Slowdown in 2019 - Fang Shanghai, CSRC

8.     Positive Global Trends Continue to Lift Corporates

9.      Trade War Escalation Would Knock 0.4% off World Growth

10.  Could A Trade War Derail Global Growth?

11.   Africa FICC - Africa’s External and Intra-Regional Trade

12.  Nigeria’s Merchandise Trade Rose Significantly in Q3, 2018

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related News