Global trade takes hit, with biggest drop since 2009

ZURICH • Global trade has taken a sharp turn south, reinforcing the view that the world economy is in its worst state since the financial crisis a decade ago.

Figures published on Monday show that trade fell 1.8 per cent in the three months through January, compared with the previous period - the biggest drop since May 2009. On an annual basis, trade posted its first decline in nine years.

The January World Trade Monitor by the Dutch statistics office includes an assumption of 0 per cent import/export volume growth for the United States as the shutdown meant there was no data.

On a month-on-month basis, the global trade volume was up 2.3 per cent, though the figure is erratic and it fell almost 4 per cent over November and December.

The underlying figures tally with a global growth tracker by Bloomberg Economics, which puts world growth at 2.1 per cent on a quarter-on-quarter annualised basis, down from about 4 per cent in the middle of last year. Central banks have reacted by postponing tightening.

Chicago Federal Reserve president Charles Evans said on Monday that right now, the "risks from the downside scenarios loom larger than those from the upside ones".

The pessimistic view was echoed by International Monetary Fund first deputy managing director David Lipton, who said there are "growing risks and uncertainties", including protectionism and US-China trade tensions.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on March 27, 2019, with the headline 'Global trade takes hit, with biggest drop since 2009'. Print Edition | Subscribe