This year promises to be an exciting one for us. With Donald Trump's inauguration, and Article 50 triggering the Brexit process, both in Q1, we are expecting the politics of trade to be at the centre of public discourse. Here are our initial thoughts on the outlook in 2017 and we look forward to sharing more with you during the course of the year.
The picture for global trade in 2017 is uncertain and likely to be dominated by the politics of trade rather than the economics. We are expecting values in world trade to increase in 2017 by less than 0.3% with 12 out of the G20 countries set to see either exports, imports or both, shrink during 2017 (Figure 1). While we are expecting China’s exports to grow at over 4% this year, this is a long way from the heady days of 2010 and 2011 when trade grew at twice the level of GDP.
The picture for global trade in 2017 is uncertain and likely to be dominated by the politics of trade rather than the economics. We are expecting values in world trade to increase in 2017 by less than 0.3% with 12 out of the G20 countries set to see either exports, imports or both, shrink during 2017 (Figure 1). While we are expecting China’s exports to grow at over 4% this year, this is a long way from the heady days of 2010 and 2011 when trade grew at twice the level of GDP.
Figure
1: Forecast G20 Import and Export
Growth, 2016-2017 (%), Source: Equant Analytics 2017
In the wake of the Brexit referendum, the UK’s exports are expected to see flat or negative growth in 2017. Similarly, imports are expected to increase only slightly. This is simply a function of the weaker sterling pushing export prices down and import prices up, but it sends a worrying signal for economic performance more generally as the effects of the Article 50 trigger and broader uncertainty around investment begin to take hold.
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