This week the IMF published its 6 monthly world economic outlook and associated databases. Compared to the April 2023 version, the outlook for trade in 2023 has deteriorated. The current expectation for 2023 goods imports is a decline of 0.5% rather than growth of 1.6%. At a country level, the picture is mixed – with some countries showing an upgrade and others a downgrade of their previous outlook.
The figure below shows an overview of historical and forecast annual growth rates for the volume world imports between 2015 and 2028 based on the April and October 2023 IMF World Economic Outlook. Measuring imports in volume rather than price provides a more realistic picture of trade as it adjusts for inflation. While there have been some minor revisions to historical data and forecast growth rates for the period between 2024 and 2028, the biggest change is in a downgrade of the expected full year growth rate for 2023. The long-term consequence of this would be that world trade at the end of 2026 will only be 15% rather than 17% larger than at the end of the 2021.
At a country level the picture is more mixed. The two charts below give an indication of where upgrades and downgrades to the forward outlook for imports for 2023 and 2024 have taken place. The outlook for most of Asia and most of Europe has been downgraded in 2023. For 2024, China and the US have seen a downgrade, while most of South and Southeast Asia as well as Europe are looking better (or less worse) than before.
The next two charts give an indication of where export expectations have been either down or upgraded or are largely unchanged.
More interesting, however, is how this plays out in actual growth numbers on a country level. The next four charts show the outlook for 2023 in the October and April 2023 IMF forecasts, respectively.
While the charts are self-explanatory, it is worth noting how the general short and medium term outlook have deteriorated. Specifically:
- China: while 2023 exports were already expected to decline in April, import performance in 2023 has also been weak and in the latest forecast both imports and exports are expected to decline this year. This has had somewhat of an impact on the medium term outlook.
- USA: both the short and medium term outlook remains largely unchanged.
- Europe: both the short and medium term outlook has been downgraded, although we note that France appears to be a real bright spot, particularly on the export side.
- India: performance still expected to be strong, but less strong that previously forecast.
- Indonesia: is expected to grow even faster than previously expected. This is something we intend to look at in more detail in subsequent research.
- Meanwhile, Vietnam is expected to grow at a slower pace than expected.
- Brazil: not a big change in the outlook for exports, but a downgrade on the import side.
- Turkey: exports in 2023 bear the mark of the earthquakes and this has affected the medium term 2022-2026 outlook for exports, but import growth continues to be strong.
See also our previous article on the trade outlook from April 2023 for further context.
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