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Global Economics

Global Trade Monitor

Global Trade Monitor

Global trade boosted by post-lockdown rebound in China

A sharp rebound in Chinese exports helped lift world trade higher in May, and could boost trade further in the coming months. But outside of China, forward-looking indicators still suggest that weaker global demand will weigh on trade, meaning that official data may present an overly positive steer on world trade over the next couple months. Weaker demand and improved supply has already been feeding into lower shipping costs, pointing to some easing of global inflationary pressures.

27 July 2022

Global Trade Monitor

Rebound in trade likely to prove short-lived

Official data showed that world trade rose slightly in April and limited data for May suggest that it probably rose further as disruptions from lockdowns in China eased. But weaker global final demand for goods, due to a gradual normalisation in spending patterns, lower real incomes, and higher interest rates, will be a headwind to world trade in the coming months. And although shipping costs remain elevated, the sharp fall in spot freight rates tentatively points to some easing of inflationary pressures for goods.

28 June 2022

Global Trade Monitor

More signs that softer demand is weighing on trade

After a growth spurt late last year, world trade flatlined in Q1. The Ukraine war and lockdowns in China raised concerns that renewed supply bottlenecks would choke up world trade. However, notwithstanding the reported surge in US imports in March, it generally seems to be softer demand more so than restricted supply that is behind the recent weakness in world trade. Accordingly, the latest trade data are more consistent with a picture of slowing global economic growth than of mounting pipeline inflation.

27 May 2022
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Global Trade Monitor

Weaker demand starting to weigh on trade

While official data showed that world trade held up well in February, timelier national indicators suggest that exports from some Asian economies have fallen since then. This slowdown seems to reflect weaker global consumer demand, which we expect to persist. So far, there is only limited evidence that pandemic-related disruption to supply from lockdowns in China is having an adverse impact, but there is clearly a risk that this adds to headwinds to global trade in the months ahead.

26 April 2022

Global Trade Monitor

Early signs of trade fallout from the war

The latest available official data suggest that world trade held onto gains from Q4 in January, and timely indicators suggest that it may have edged up in February. It will be May before we have comprehensive official data on the hit to trade activity in March from the war. For now, though, AIS vessel positioning data indicate that seaborne trade has fallen significantly in Russia, and ground to a halt in Ukraine.

29 March 2022

Global Trade Monitor

Russia-Ukraine war risks renewed trade disruptions

The latest trade data suggest that the Omicron wave caused limited disruption at the turn of the year. And, for now, it looks like the impact of the Russia-Ukraine war on world trade will be small in aggregate. But the hit would become much larger if energy trade with Russia were cut off. And there is also a chance that Western sanctions will worsen bottlenecks – and hence dent trade – in other goods, such as autos.

Global Trade Monitor

Trade rebound chimes with better news on supply chains

After gradually trending lower for much of last year, November marked the second consecutive month of strong growth in world trade, which reached a new record high. This adds to evidence that some product shortages began to ease towards the end of 2021. Even so, it will be well into 2022 at least before shipping bottlenecks improve materially. In the meantime, freight rates are likely to remain elevated.

26 January 2022

Global Trade Monitor

Supply constraints cause world trade to trend lower

World trade has continued to edge down from its high peak in March, as supply shortages have meant that Asian exporters remain unable to keep up with strong demand from consumers in advanced economies. Even when demand does eventually abate, large backlogs of unmet orders mean that Asian exports will remain elevated, which should keep shipping and air freight costs sky-high for some time.

25 November 2021
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