Trade slows down across G7 and BRICS in spite of optimistic central bankers

Global trade, a barometer for global growth is pointing to trending slow down across G7 and BRICS countries. Without rise and sustenance in trade across world, it will be difficult to achieve sustained growth.

The chart attached points to slow down in global trade, both in exports and imports since first quarter of 2014 and slow-down has been quite rapid.

Central bankers' (FED, BOJ, BOE) who were all upbeat on global growth back in 2013, some (BOE, FED), indicated tightening of policy and faster achievement of both inflation and wage growth are now back to their drawing board, scratching heads over recent slowdown.

• Total G7 and BRIICS international merchandise trade, in current US dollars, continued to contract in the second quarter of 2015, with exports and imports declining by 0.9% and 1.2% respectively, compared with the previous quarter.
   
• The slowdown in trade in the second quarter of 2015 was particularly marked in South East Asian economies, with exports and imports contracting in China (by 3.5% and 0.1%, respectively) as well as in Japan ( by 4.4% and 5.4%) for the third consecutive quarter, and Indonesia (by 0.8% and 6.6%),for the sixth straight quarter.
   
• Exports and imports in India rebounded slightly (up 0.6% and 3.4%) from the slump in the first quarter of 2015 but remain below previous 2011 lows.
   
• Exports and imports also decreased markedly in Brazil (by 1.2% and 14.4%), and the Russian Federation (by 3.6% and 9.7%).
   
• Exports rose by 4.3% in South Africa while imports contracted by 8.5%.

It can be said, with ongoing currency crisis across emerging markets, imports are likely to shrink faster in BRICS.