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Global trade growth will continue to lose momentum over the next three months as findings indicate that prospects are slowing down for almost all countries, according to the latest DHL Global Trade Barometer (GTB), released in March.

The overall growth index decreased by -4 points compared to the last update in December. However, scoring 56 points in March, the index still signals slight growth, even though it comes ever closer to the threshold of 50 points, which marks the line between positive and negative growth in the GTB methodology.

No surveyed country was able to maintain an overall index value of 60 points or higher, with prospects slowing down for almost all countries, except Germany and the UK.

Tim Scharwath, CEO of DHL Global Forwarding, Freight, said: “While we are witnessing an ongoing slowdown of this growth momentum, the current DHL Global Trade Barometer still shows trade activity will remain positive over the next three months. Thus, the index does not reflect the dominant negative public sentiment with respect to international trade—at least not in the short-term.”

Commenting on the latest results, Eswar S. Prasad, professor of Trade Policy and Economics at Cornell University in Ithaca, New York, USA, said: “The DHL Global Trade Barometer paints a picture of positive but weakening global trade growth. This is consistent with eroding growth momentum in the major advanced and emerging market economies. Global trade flows are also being dampened by ongoing trade tensions and geopolitical uncertainties, which in turn are hurting business and consumer sentiment.”

Prasad added: “These developments could adversely impact consumer demand for durable goods and business investment in physical capital, and also prompt a re-evaluation of the structure of international supply chains. All of these factors—which are reflected in the overall, country, and sectoral indexes of the Global Trade Barometer—add up to a softened positive short-term outlook and carry the risk of further deteriorating prospects for world trade.”

The weaker global average outlook is driven by reduced growth rates in both air and ocean trade.

The global index value for air trade has declined by -4 to 55 points. All surveyed countries are forecasted to slow down in air trade except for Germany. The largest declines are expected for South Korea (-14), India (-13) as well as Japan (-5). China and U.S. are also seen to drop moderately with -3 and -2 points. Moreover, the index for South Korea and UK air trade drops below 50 points, suggesting a contraction of air trade growth.

Global ocean trade outlook is also modest, having seen decelerated growth (-5 points to 56). The largest downturns are found in India (-20), South Korea (-10) and US (-7). German ocean trade further weakened, as the country’s index falls slightly by -2 to 46 points. China (-1 point) is forecasted to decelerate slightly. Meanwhile, ocean trade in the UK (+4 points) and Japan (+2 points) is picking up some steam.

The overall reduction of expected trade growth is also reflected by the country-specific scores: Only Germany’s and the UK’s overall trade indexes have improved slightly by +2 points. The scores of the remaining five surveyed countries have decreased.

India and South Korea, the countries with the strongest growth in December’s GTB update, have, three months later, account for the highest and second-highest overall index losses, respectively. South Korea records losses of -12 points, sliding from moderate trade growth into stagnation and from the second highest to the lowest GTB score (now 49).

The decrease of India’s forecasted trade growth is even higher at -18 points. This is mainly due to the country’s much weaker ocean trade, whose index dropped by -20 points. Despite the losses, India maintains the highest predicted trade growth of all GTB countries (now scoring 59) due to the generally weakened forecasts.

Despite the trade tensions between the U.S. and China, outlook for Chinese trade decreased only minimally by -1 to 56 points. This indicates only small trade growth but no feared downturn. The U.S. however has a decline of -5 to 55 points. This puts them roughly on a par with China in terms of predicted trade growth for the next three months.

 

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