Trade Recovery Expected
December 8, 2015 | HSBCEstimated reading time: 2 minutes
Trade is expected to recover in 2016, with global growth in merchandise trade rising to around 3 per cent, according to the latest HSBC Trade Forecast.
This expansion will be driven by developed markets, although in the longer term emerging economies are likely to take the lead as trade growth accelerates further. New agreements to liberalise trade could provide a further potential boost, the report says.
The Trade Forecast, modelled for HSBC by Oxford Economics, predicts world merchandise trade will grow just 1 per cent in 2015, down from 3.1 per cent in 2014. This would be the lowest annual growth rate since 2009. But the report concludes that the recent slowing of global trade is cyclical, rather than structural, estimating that growth in trade of goods will recover to around 3 per cent in 2016 before rising to 5 per cent a year between 2018 and 2020.
A slowdown in Chinese manufacturing and weaker imports in emerging markets are some of the causes of recent sluggish trade growth, according to the report. Merchandise imports for 2015 are expected to contract by 6 per cent in China and 8 per cent in Brazil. But import volumes in developed economies remain relatively robust: they are forecast to grow by between 5 to 6 per cent in the US and Western Europe in 2015.
Continued economic growth, investment and consumption in the US and the eurozone are expected to drive trade expansion for the next couple of years. Emerging economies will be the driving force in the longer term, however. The report predicts that Asian nations with young populations and rising incomes will lead the way. Goods exports from India and Vietnam are expected to exceed 10 per cent a year between 2021 and 2030.
Efforts to liberalise trade could also have a positive impact if fully implemented. The recently expanded World Trade Organization (WTO) Information Technology Agreement now guarantees duty-free trade in electronics products worth around USD1.4 trillion each year. In addition, 12 nations have negotiated the Trans-Pacific Partnership, a new trade agreement to bring down tariffs and barriers across an area that represents 40 per cent of global GDP. A WTO Trade Facilitation Agreement, due to be ratified by member states, promises to simplify customs procedures, making it cheaper and easier to trade goods across borders.
Stuart Tait, Global Head of Trade and Receivables Finance, HSBC, said: “While in the short term the outlook for trade is challenging, over the longer term there are reasons for optimism, as the outlook for the next few years and beyond picks up. We are working with businesses around the world to position them to take advantage of the recovery.”
Suggested Items
Digitalisation and ESG
04/19/2024 | Marina Hornasek-Metzl, AT&SDigitalisation and ESG are prominent and high-priority topics in the global business community. The first focuses on applying technology throughout the value chain to produce faster, smarter, and more desirable business outcomes. The latter emphasises the broader value a business is expected to create for its stakeholders from an environmental, social, and governance perspective.
Two Industry Rising Stars Recognized at IPC APEX EXPO 2024
04/17/2024 | IPCTwo of the industry’s best and brightest were presented with an IPC Rising Star Award at IPC APEX EXPO 2024 in recognition of their leadership roles and support of IPC standards, education, advocacy, and solutions to industry challenges. Award recipients were Naim Kapadia and Michael Schleicher.
Two Long-time IPC Volunteers Receive Dieter Bergman IPC Fellowship Award
04/17/2024 | IPCThe Dieter Bergman IPC Fellowship award was presented to two IPC volunteers at IPC APEX EXPO 2024. The award recipients have fostered a collaborative spirit, made significant contributions to standards development, and have consistently demonstrated a commitment to global standardization efforts. Tiberiu Baranyi and Zhiman Chen were chosen as award recipients as they embody the work ethic and spirit of the late Dieter Bergman, an industry pioneer and icon. As part of the award, they bestowed Dieter Bergman Memorial Scholarships to the university or college of their choice.
Northrop Grumman honors Calumet Electronics with Supplier Excellence Award
04/17/2024 | Calumet ElectronicsNorthrop Grumman Corporation has recognized Calumet Electronics during the company’s 2024 Supplier Excellence Awards for “exceptional performance and unwavering commitment to delivering with excellence.” Calumet is one of 70 suppliers recognized from across the globe. In its award category of “Supplier Strategic Excellence,” Calumet was honored alongside global corporations such as Amazon Web Services, Dell Technologies, and Eaton Corporation.
Ark Electronics Expands Global Manufacturing Factory Network in North America and Europe
04/17/2024 | PRNewswireElectronic Manufacturing Company Ark Electronics recently announced the expansion of its Global Factory Network with the addition of Electronics Manufacturing Service (EMS) capabilities in Mexico and Europe.