Global trade likely to grow modestly this year, says Deutsche Bank

Global trade growth nearly stagnated last year at just 1.3 percent, and was even negative in some months. Global trade rebounded again in winter, growing about 3 percent as compared to the same period a year earlier. With the upbeat confidence taking place throughout the globe, this recovery might continue, noted Deutsche Bank in a research report. But this trend is not yet being shown entirely in other hard economic indicators, mainly highly correlated with global trade, and confidence might thus overstate the actual trend slightly.

“Still, our simple model of world trade, which suggests moderate growth of just over 2 percent in 2017 and around 3 percent in 2018 might represent the lower limit of the forecast range”, added Deutsche Bank.

But, compared to earlier cycles, the upturn might stay subdued, not least due to the global trade restrictions that have been ratcheted up since 2008. The present buoyancy in global trade is partially because of the increase in the price of crude oil to more than USD 50/barrel that has resulted in a rise in investment activity in several emerging markets and in the U.S. Increased revenues due to the increased oil price are easing the funding of pent-up demand for investment in the oil industry and other sectors, and thus boosting global trade, noted Deutsche Bank.