The International Monetary Fund (IMF), the World Trade Organisation (WTO) and Organisation for Economic Cooperation and Development (OECD) have all just published their near-term projections. The general consensus is that 2023 will be disappointing and 2024 will be better. The chart below shows a comparison of WTO and IMF forecasts, published on 5 and 11 April 2023, respectively. After a strong rebound in 2021, moderate performance in 2022, the expectation is in the order of 1.5% – 1.7% in 2023.
However, WTO has pointed out that there is great deal of uncertainty in relation to predictions with 2023 trade possibly falling anywhere between -2.8% and +4.7% based on current GDP assumptions.
Generally, advanced economies underperform emerging and developing economies on both exports and imports, but the IMF expectation is that advanced economy exports will underperform in 2023 – much like the situation in 2022. Emerging economy exports are driven very much by imports in advanced economies and economic weakness particularly in Europe and to a lesser extent in North America is weighing on growth prospects.
On the import side, emerging and developing economies are expected to perform better than advanced economies in 2023 and 2024.
The next three charts illustrate growth in import and export volume for the top economies worldwide for 2022, 2023 and expected average annual performance between 2022 and 2026. In 2022, Chinese trade declines dragged overall world performance down, while the US performed fairly strongly, although we note that the first half of 2022 was significantly better than second half. In 2023, both China and the US are expected to weigh on the world average, with very little excitement expected from anywhere other than India, Brazil, Taiwan, Singapore, Turkey and the UK. Over the medium term, Indonesia, India, Turkey, Singapore, Vietnam, and Saudi Arabia are showing the greatest expected potential.
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