Global trade has been growing slowly for the fifth consecutive year, and 2016 showed its weakest performance since the 2008-2009 global financial crisis. The World Bank’s latest Annual Report on Global Trade Watch: Trade Development 2016 points out that new evidence shows a link between policy uncertainty in developed countries and weak trade growth in 2016. The rise in economic policy uncertainty is a factor leading to a decline in world trade growth in 2016.
According to the World Bank report, preliminary data showed that the growth of world merchandise trade in 2016 was only slightly higher than 1%, lower than 2% in 2015 and 2.7% in 2014. However, the growth rate of service trade continued to remain relatively resilient, with a slight rebound after a decline in 2015. The World Bank report found that based on a 30-year extensive data sample analysis of 18 countries, the rise in economic policy uncertainty in developed countries in 2016 may lead to a 0.6 percentage point drop in trade growth rate, which caused trade growth rates in 2015 and 2016. The difference accounts for about 75%.
In addition, although trade growth has been slow in the past few years, or concentrated in high-income countries, or concentrated in developing countries, in 2016, these two types of economies showed weak trade growth characteristics.
Report author and World Bank economist Christina Constantiniscu, Aditya Matu and Michelle Ruta said that policy uncertainty in Europe and the United States has lowered the overall global growth rate, thus Has a negative impact on trade. In an environment of increased uncertainty, companies may choose to postpone investment and export decisions, and consumers may reduce spending. The dissolution of trade agreements may also increase policy uncertainty and hurt trade growth.
The report also provides new evidence linking the slowdown in trade growth to the slowdown in productivity growth. Slow trade growth reflects the stagnation of global value chains.
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