World trade volumes on the comeback trail?

A contrarian view to the prevailing consensus that world trade growth has peaked and will never again see the growth rate enjoyed between 1970 and 2012 has been published by ING Bank. The bad news which has been focused on by commentators is that trade volumes are stagnant at best. The latest available CBP World Trade Monitor reports that world trade in February 2015 was down 0.9% month on month, following a 1.6% decrease in January this year. World Trade Organisation (WTO) economists predict that growth in the volume of world merchandise trade will pick up only slightly over the next two years, rising by 2.8% in 2014 to 3.3% in 2015 and eventually by 4.0% in 2016. These factors combined with the commissioning of supersized container vessels led Drewry Maritime Research to predict that there would be a “massive” surplus of mid-sized (4 000- to 5 000-TEU) vessels by 2016. The bank’s report “The World Trade Comeback” predicts that, while it is unlikely that growth will return to the elevated levels experienced in the 15 years prior to the collapse, there will be a rebound. “There is still plenty of potential for further integration of big emerging markets, such as China, India and the Philippines into the global economy. The big bang that happened in the 1990s and 2000s isn’t going to be repeated, but economic integration is far from over,” says Raoul Leering, ING Bank, head of international trade research.