Weaker demand from emerging markets made 2015 the worst year for world trade since the aftermath of the global financial crisis, highlighting rising fears about the health of the global economy.
The value of goods that crossed international borders last year fell 13.8% in dollar terms—the first contraction since 2009—according to the Netherlands Bureau of Economic Policy Analysis’s World Trade Monitor. Much of the slump was due to a slowdown in China and other emerging economies, Yahoo reported.
The new data released on Thursday represent the first snapshot of global trade for 2015. But the figures also come amid growing concerns that 2016 is already shaping up to be more fraught with dangers for the global economy than previously expected.
Those concerns are casting a shadow over a two-day meeting of G20 central bank governors and finance ministers which started on Friday. Mark Carney, the Bank of England governor, was set to warn the gathering that the global economy risked “becoming trapped in a low growth, low inflation, low interest rate equilibrium”.
The Baltic Dry index, a measure of global trade in bulk commodities, has been touching historic lows. China, which in 2014 overtook the US as the world’s biggest trading nation, this month reported double-digit falls in both exports and imports in January. In Brazil, which is now experiencing its worst recession in more than a century, imports from China have collapsed.
Exports from China to Brazil of everything from cars to textiles shipped in containers fell 60% in January from a year earlier while the total volume of imports via containers into Latin America’s biggest economy halved, according to Maersk Line, the world’s largest shipping company.
“What we are seeing right now from China is not only a phenomenon for Brazil; we are seeing the same all over Latin America, declining (Chinese exports) volumes into all the markets,” said Antonio Dominguez, managing director for Maersk Line in Brazil, Paraguay, Uruguay and Argentina. “It has been going on for several quarters but is getting more evident as we move into the year 2016.”
However, there are some signs a trade rebalancing is under way in places such as Brazil. The collapse in Brazilian imports from China has been accompanied by a rise in exports from Brazil to Asia, driven in part by a 40% depreciation of the real against the dollar over the past 12 months.
“On a global level, most indicators suggest that trade growth will remain very weak,” said Andrew Kenningham, senior global economist for Capital Economics. “But we do not believe world trade is about to fall off a cliff.”
Largely because of currency swings and a collapse in the price of commodities the value of both exports and imports fell in every region of the world last year.
