World trade heading for the worst year since 2009 - ING

According to analysts at ING, world trade is fighting an uphill battle in 2019 as during the last two months of 2018, global trade levels dropped more than 3%.

Key Quotes

“The latest data shows that the volume of world trade in March was still lower than average trade levels in 2018. This means that global trade volumes still have quite some catching up to do in 2019 before the year to date volumes match those of last year. This feeding through of the setback in late 2018 strongly limits the upward potential of trade growth this year.”

“1Q19 has shown better than expected economic growth in the US, the eurozone and China, but so far this has hardly translated into higher growth for world trade. However, we expect trade levels to adjust to higher levels of GDP and industrial production.”

“The growth of industrial production has been negative in some parts of the world during the first few months of this year but not everywhere. Global industrial production has been well above 2018 levels, indicating that there is ample room for trade to do some catching up.”

“We expect the upward influence of the economic cycle on trade in 2020 to be roughly the same as in 2019, which would result in world trade growing by 1.7% next year. Taking into account the feeding through of the tariff hikes of 2019, trade growth would be 1.6% in 2020.”