The DHL World Trade Barometer forecasts a slight decline in world trade. Specifically, the overall index fell one point to 47, indicating that world trade will continue to lose momentum over the next three months.
However, the downward trend has slowed significantly since the June update, when the index recorded a loss of eight points.
The slowdown extends to almost all countries, with five out of seven in negative territory. “ Across the globe, trade conflicts continue to persist. Geopolitical tensions are causing uncertainty. In this context, world trade continues to develop surprisingly well. Although the DHL World Trade Barometer has fallen further, with an index value of 47 points, world trade is still close to remaining at its highest level ,” says Tim Scharwath, CEO of DHL Global Forwarding Freight. “ This strengthens our belief that globalization will continue and that logistics will remain its main enabler in the future as well .”
The index shows little deviation between the seven economies that comprise it, as well as in comparison to the previous update in June. All country indices are close to 50 points, which is the threshold for growth. Five of the seven countries show slightly negative growth indicators, registering indices just below 50.
In this regard, Eswar S. Prasad, professor of trade policy and economics at Cornell University in Ithaca, points out that “ China-US trade tensions have escalated to higher levels and are already impacting global supply chains as companies adapt to the new reality that both sides are creating in a long trade war. Increased trade tensions elsewhere in the world, including Japan and Korea, and the looming prospect of a disorderly Brexit, are likely to have an increasingly detrimental effect on world trade volumes. The level of uncertainty regarding macroeconomic growth prospects has reduced trade investment worldwide, with adverse effects on international trade in machinery and equipment . Household consumption remained strong in most major economies, but stagnation in trade in durable consumer goods, reflected in component indices, suggests a weakening in this key driver of GDP growth. Overall, this update confirms the slowdown in global growth and raises concerns about stagnant growth in the coming months .”
