Global trade growth back to 8% in 2016, India to lead, says HSBC

HONG KONG - Emerging from a period of stagnation triggered by the global financial crisis, world trade is set to resume its growth trajectory in 2016, presenting fresh opportunities for businesses that have positioned themselves to benefit, a new study from HSBC Commercial Banking shows.

Exporters and importers in cyclical sectors, such as transport equipment and metals, will be the first beneficiaries as the pace of growth in cross-border commerce recovers to 8% in 2016 from just 2.5% last year, according to the HSBC Trade Forecast.

Looking further out to 2030, the Forecast projects that global merchandise trade will more than triple as astute companies capitalise on increasing productivity and consumer wealth in the emerging markets.

“Businesses can’t afford to fixate on the risks posed by today’s geopolitical problems and uneven rates of growth at the expense of their future planning,” said Simon Cooper, Chief Executive of HSBC Commercial Banking. “Conditions have undoubtedly been tough for trade recently, but we are now turning a corner. The medium and long-term prospects look significantly better for businesses that have prepared themselves for recovery in both developed and developing markets.”

Increasingly robust economic conditions in the US and the UK, along with a gradual rebound in the Eurozone, will give many international businesses a platform on which to build during 2015. In the short term emerging markets growth looks more vulnerable – while still rapid in relative terms – reflecting a combination of structural challenges and political uncertainties in Eastern Europe and the Middle East.

By 2030, however, China is expected to increase its overseas shipments five-fold as it strengthens commercial ties to emerging Asia, the Middle East and North Africa. China currently exports 1.4 times more goods than Germany and the US by value, and will widen this gap to almost three times US exports.

India, meanwhile, is likely to be the world’s fastest-growing exporter from 2014 to 2030, and has the potential to move from the 14th largest exporter of goods by value to the world’s 5th largest. www.hsbc.com (ATI).