Minor setback for world trade but upward trend expected to continue - ING

World trade shows a minor setback in July of -0.4% MoM, following 0% growth in June (initial estimate: 0.5%), notes Timme Spakman, Economist at ING.

Key Quotes

“This decline has been mainly driven by slowing import demand form emerging Asia, which has a large weight in global trade. Nevertheless, the rolling three-month to three-month growth trend is positive (1.5%) and we expect this to continue.”

“World trade figures are very erratic, a month decline is nothing out of the ordinary. We expect the upward trend to continue.  For the first time we see a broad based global economic recovery, boosting demand for imports. This has been lacking in recent years. We expect economic growth to remain robust in Europe and China and no severe setback in the US.”

“Trade also benefits from the fact that protectionism has not materialized yet. What catches the eye is that during the first months of Trumps presidency trade facilitation has dominated trade restriction policies. The estimated coverage of trade-facilitating measures implemented by G20 economies (US$163 billion) significantly exceeded the estimated trade coverage of trade restrictive measures (US$47 billion). The Trade Facilitation Agreement (ratified in February this year) and the information technology agreement (extended in 2015) have been important contributors.”

“Together with the positive economic cycle, this makes us expect a continuation of the upward trend.”