The DHL Global Trade Barometer (GTB) indicates that world trade will contract over the next three months.
DHL has reduced the GTB trade outlook by two points to an index value of 45. According to the company, this shows that global trade continues to lose momentum, albeit mildly.
Tim Scharwath, ceo of DHL Global Forwarding, Freight, said: “According to the DHL GTB the year will probably end with moderate world trade. However, we have to bear in mind where we come from: The rapid growth world trade has undergone in recent years was like climbing the Mount Everest. Now, we are on the descent, but we are still breathing altitude air”
Eswar S. Prasad, professor of trade policy and economics at Cornell University in the USA, added: “The world economy is entering a phase of stagnation, reflecting weak and slowing growth in some major economies and essentially no growth or mild contraction in others.
“Persistent trade tensions, elevated political instability and geopolitical risks, and concerns about the limited efficacy of monetary stimulus continue to erode business and consumer sentiment, with detrimental effects on investment and productivity growth.
“The latest DHL GTB update shows that international trade flows have been adversely impacted by these factors. The declining indexes for China and the US, the two main drivers of global growth, portend a worsening global economic outlook. Overall, this GTB update paints a sobering picture of gloomy prospects for the world economy and global trade for the remainder of this year.”
Out of seven counties surveyed, six recorded negative trade outlooks. Germany and China both fall by three points to an index of 45 and 42, respectively. South Korea decreased by two points to an index value of 43, while the USA dropped by one point to 44.
While Japan and the UK had been the only countries with positive trade outlooks in September’s update, the two countries recorded the highest losses in this period. Both Japan and the UK fell below the 50-point threshold, with a decrease of five and four points, respectively.
India is the only country that has managed to return to a moderate growth outlook, said DHL. Compared to the previous GTB, India gained five points and now has an index value of 54.