Robust economic growth in the U.S. and the UK and a gradual recovery in the eurozone are expected to lift world trade volumes in the next few years, according to HSBC’s latest Trade Forecast.
Trade has suffered two years of sluggish growth, held back by weak demand in industrialised and emerging markets.
Trade has suffered two years of sluggish growth, held back by weak demand in industrialised and emerging markets. But robust economic growth in the USA and the UK and a gradual recovery in the eurozone are expected to lift volumes in the next few years.
The HSBC Trade Forecast is modelled by Oxford Economics for HSBC. It predicts that annual growth in the value of traded goods will increase to about 8 per cent by 2016 from 2.5 per cent in 2013.
It suggests that economic growth in emerging markets remains rapid compared to developed markets, but may be affected in the short term by structural challenges and political uncertainty in Eastern Europe and the Middle East.
In the longer term, the outlook for trade remains positive, according to the forecast. Emerging Asia is expected to be at the forefront of growth as the middle classes expand and infrastructure is improved.
The forecast suggests that global trade in goods will grow at an average annual rate of 8 per cent between 2016 and 2030. This would mean the value of global merchandise trade would more than triple between 2014 and 2030.
“Conditions have undoubtedly been tough for trade recently, but we are now turning a corner," said Simon Cooper, Chief Executive of HSBC Commercial Banking. "The medium and long term prospects look significantly better for businesses that have prepared themselves for recovery in both developed and developing markets.”
Five of the six economies that expect the fastest export growth between 2014 and 2030 are from emerging Asia. Exports from Vietnam, China, India, Malaysia and Indonesia are predicted to grow between 8 per cent and 11 per cent a year.
China’s share of world exports is expected to rise to 29 per cent by 2030 from 18 per cent in 2013, according to the forecast.
China’s currency, the renminbi, is increasingly being used for trade and invoicing and this trend is likely to continue as China’s exchange-rate liberalization continues.
India is expected to be the world’s fastest-growing exporter between now and 2030. Low-skilled sectors such as textiles and jewellery are expected to become less dominant as production shifts to higher-end sectors such as pharmaceuticals and cars.