Sydney, Australia – After a very low pace of growth in 2015, global trade growth has slowed even further over the first half of 2016, according to Atradius Credit Insurance N.V.
Trade growth in Emerging Asia, the world’s second largest trade bloc, is extremely low, as China rebalances from investment-driven growth toward a more inward-looking consumption-led growth.
Lower commodity prices have also dampened investment in natural resource-rich economies around the world which has contributed to a sharp contraction of trade in Eastern Europe and slowdown in Latin America. Even the US has seen its trade growth grind to a halt, due to lower investment in the oil and gas sector, but also because of lower external demand and a strong USD which have reduced exports.
In 2016, the tempo of growth in world trade is expected to be about one-third of global GDP growth. Such a low rate of trade growth has not occurred since the global economic crisis of 2009.
Anti-globalisation sentiment is rising, as is evidenced by political developments like Brexit and the election of Donald Trump as US president. Trade liberalisation efforts like TPP and TTIP are stalling, thereby threatening the outlook for trade.
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