Trade growth in India remains positive amidst global contraction
The DHL Global Trade Barometer (or “Barometer”), an early indicator of global trade developments calculated using Artificial Intelligence and Big Data, predicts trade in India will grow in the third quarter of 2019, albeit at a slower rate with the country’s overall trade index declining 6 points to 53. It is the only one of four countries in Asia tracked by the Global Trade Barometer to still register an index value of above 50.
“Amidst heightened and prolonged volatility, India’s economy remains a notable positive exception to the trend of global trade contraction. As the country with the most bullish trade forecasts in previous iterations of the Global Trade Barometer, India’s historic pace of trade growth has so far cushioned it somewhat against global contractionary sentiment. Nevertheless, the country’s marked slowdown in trade growth suggests businesses remain reluctant to overexpose themselves to global trade volatility.” said Niki Frank, managing director for DHL Global Forwarding India.
Strong ocean trade will contribute significantly to that growth with an index value of 59: ocean imports of both Industrial and Basic Raw Materials are expected to remain strong, along with ocean exports of Basic Raw Materials, Chemicals and Products and Temperature and Climate Control good. However, air trade looks set to contract with an index of just 45, due to softening exports of Consumer Fashion Goods; persistent weakness in High Technology and Machinery imports; and a sharp decline in exports of Chemicals and Products.
Latest results show negative effects of trade wars
For the first time in six quarters, the Barometer’s results predict a slight decline in global trade in the coming three months, with its overall world trade outlook dropping to just 48 index points. The continued trade disputes between the US and China have contributed significantly to that decline, with both countries experiencing the largest declines in their trade outlook (-11 points for the US, -7 points for China) out of all countries surveyed by the Barometer.
Commenting on the latest forecast, Tim Scharwath, CEO of DHL Global Forwarding, Freight, said, “Amidst rising US-Chinese tensions, the slightly negative outlook for global trade for the third quarter of 2019 does not come as a complete surprise. The latest GTB clearly illustrates why trade disputes create no winners. Nevertheless, some major economies such as Germany continue to record positive trade growth. And from a year-to-date perspective, world trade growth has still been positive. Hence, we remain confident in our initial prognosis that 2019 will be a year with overall positive, but slower trade growth.”
Scharwath added, “The GTB is a useful tool for us to anticipate economic developments at an early stage. We are well-prepared to tackle the forecasted developments. Our divisional structure and portfolio as well as our worldwide activities allow us to balance economic effects within the company and remain resilient to changes in global trade dynamics.”