ECB Expects Global Trade to Gradually Increase in 3Q as Trade War Persists

ECB has stated that global trade is likely to pick up gradually in the third quarter in 2019 according to the statistic indicators.

The European Central Bank published a somewhat negative outlook of global trade on Monday, August 5, 2019, in an economic bulletin that global trade is likely to pick up gradually in the third quarter in 2019 according to the statistic indicators.

The trade has been the major letdown on global growth for more than six months in 2019 as the escalation in tariffs and the dispute between the U.S. and China still exist, dragging the investment especially manufacturing down. The ECB believed the drop in investment is the main reason for the slowdown in global trade.

“Despite some signs of recovery, global trade is likely to remain more subdued than activity in coming quarters,” said ECB. “Downside risks to the outlook for trade have partially materialized in recent months due to the implementation of higher tariffs, and the threat of a further escalation of trade tensions persists.”

“Imports of manufacturing goods account for more than 50% of total gross global imports, but only make up 20% of total world value added.” continued ECB. “Hence, a sharp slowdown in manufacturing output leads to a more pronounced decline in global trade than in global GDP.”

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