Total Trade growth in 2015 | 9th January 2015
Figure 1 | Global and Regional Trade growth in 2014 and expected growth in 2015
Source | DeltaMetrics, November 2014
Delta Economics is keeping modest estimates for total trade growth this year, with world trade expected to increase from 1.25% in 2014 to a minimally higher 1.94% in 2015. This is a result of slight a slowing of trade growth in Latin America and MENA (Figure 1) which is the result of geo-political tensions and economics uncertainly, amongst other things.
Tumbling oil prices combined with impending recession in Russia are creating a particularly prickly environment for trade in Europe, which struggled to pick up momentum throughout 2014 due to economic turbulence and low consumer demand in the Eurozone. Importantly, this year, Delta expects a decline in European trade from 0.27% in 2014 to -3.36%. A major contributing factor to this is lower levels of trade in major European economies such as Germany, whose trade is expected to decline by -5.23% over the year. Levels of German exports are set to fall considerably as demand from some of its major partners declines. Russia, for example, is expected to import 5% less from Germany as its economy responds to the falling value of the Ruble and weak oil prices. Other European countries, such as Austria, France and Italy, who have large corporations that trade heavily with Russia are also expected to see exports suffer as a consequence of the countries troubles.
Delta Economics is considerable more optimistic about trade in Asia than any other region, with forecasts suggesting that trade growth will increase from 5.62% in 2014, to 6.45% in 2015. This being the case, Asia will be the main contributor to the expected growth in World trade this year. Non-crude oil will remain the largest export sector, with growth of this commodity expected at around 7.6% this year. Asian trade growth will also be driven by a significant increase in exports of Gold, which is expected to increase by 15%.
As China continues to transition from an export-led economy to one that is primarily demand and domestic consumption-driven, 2015 will also be an opportunity for Asian countries to grow as global trading hubs. There is evidence of this in our forecast. Indian total trade, for example, is expected to increase by a substantial 14.25% this year. Intra-regional trade will have some bearing on this, with exports to Indonesia, Bangladesh and Vietnam to increase by over 17% each in 2015. Extra regional trade, particularly to the MENA region will also be a critical factor, with exports to the UAE, Saudi Arabia, Israel and Iran expected to increase by over 15%.
Total Trade growth in 2015 | Author | Nayani Bandara | Analyst and Project Manager