After surging the past two years, global trade and economic output stagnated this year, according to United Nations Conference on Trade and Development’s (UNCTAD) “Nowcast” in its 2019 Handbook of Statistics.
Merchandise trade is forecast to decline 2.4 percent to $19 trillion in 2019, after growing 9.7 percent in 2018 and 10.7 percent in 2017, UNCTAD said. Trade in services is predicted to increase only 2.7 percent to $6 trillion, down from 7.7 percent in 2018 and 7.9 percent in 2017.
Real global economic output, or gross domestic product (GDP), is now expected to grow only 2.3 percent this year, 0.7 percent less than last year.
According to Macroeconomic Advisers by IHS Markit’s December U.S. economic forecast, special factors should boost GDP growth over the first half of next year–a rebound in production at GM is expected to boost first-quarter GDP growth 0.5 percent and resumed deliveries of Boeing’s 737 MAX line of aircraft next April is expected to boost second-quarter GDP growth 0.3 percent.
IHS said it looks for U.S. GDP growth of 2.2 percent next year, 1.8 percent in 2021 and 1.6 percent over 2022-23.
“We see consistency across a range of indicators–the global economy is slowing,” Steve MacFeely, UNCTAD’s chief statistician, said.
World merchandise trade increased 2.3 percent in volume terms last year. The 9.7 percent increase in values could largely be attributed to changes in prices, the report noted. For example, fuel prices recorded substantial growth year-on-year during all the months of 2018, a trend that was reversed at the beginning of 2019, UNCTAD said.
Exports rose 9.7 percent and reached a record high of $19.5 trillion in 2018. However, growth is “nowcast” to halt in 2019, with exports decreasing 2.4 percent.
In the logistics sector, maritime transport lost momentum in 2018. World seaborne trade volumes rose only 2.7 percent compared with 4.7 percent in 2017, and port container traffic grew 4.7 percent, two percentage points less than the year before.
The handbook notes that foreign direct investment (FDI) from the U.S. turned negative in 2018. It also shows the rising merchandise trade deficit of the developed economies as a group since 2016 and a growing spread of the world supply of manufactured goods by exporting economies over the past two years.