A perfect storm for world trade?

World trade has entered an exceptional situation: world GDP is growing at a reasonable pace but world trade is shrinking! A new ING study looks into this phenomenon.

The report concludes that:

  • The weak performance of industry worldwide is partly responsible for the sudden decline of world trade. Temporary negative supply effects have been at play.
  • Weakening demand for investment and consumption goods in regions like Asia are also responsible.

 

Raoul Leering, head of International Trade Research at ING, expects that:

  • The effects on the real economy of recent turmoil on financial markets could bring some more bad trade news in the months to come
  • But when financial markets settle down and the world economy keeps growing at a reasonable pace, world trade will start growing again
  • Under these conditions ING expects that world trade will grow 20% more that world production in 2016.