GLOBAL trade experienced growth in the first quarter as both goods and services volumes rebounded from the downturn of the previous year, according to the June 2023 UNCTAD global Trade Update, reported London's Baltic Exchange. But there was an increase in the political proximity of trade, suggesting a shift towards prioritizing countries that share similar political values, described as 'friend-shoring' by UNCTAD.
After a decline in the second half of 2022, trade made a strong recovery in Q1 2023, adding US$100 billion compared with Q4 2022. This growth was primarily driven increased trade in road vehicles and pharmaceuticals, said UNCTAD, the Geneva-based United Nations Conference on Trade and Development.
Similarly, the trade in the services sector displayed resilience throughout 2022 and experienced 2.8 per cent growth in Q1 2023, partly attributed to the ongoing rebound in tourism and travel following the Covid crisis.
Various negative factors contribute to this outlook, including geopolitical tensions, the war in Ukraine, weakening global economy, potential rise in trade restrictive measures, slowing industrial output, inflationary pressures, and concerns of debt sustainability.
On a yearly basis, both imports and exports of developing countries experienced an average growth rate of six per cent. However, excluding East Asian economies, the growth rate for developing countries reached 14 per cent. While most regions displayed positive trade growth on a yearly basis, trade growth in East Asia remained below average.
On a quarter-to-quarter basis, Q1 2023 saw a decline in trade values in most regions, except for the Pacific region, North America, and Africa. Notably, intra-regional trade in Africa outperformed other regions, showing a three per cent increase.
During 2022 and Q1 2023, the geographical proximity of international trade remained relatively stable, indicating a lack of significant nearshoring or far-shoring trends.
The war in Ukraine, the US-China trade decoupling, and Brexit played significant roles in shaping these bilateral trade trends.
The International Monetary Fund has warned of the risks of 'friend-shoring'. Pinelopi Goldberg, Elihu Professor of Economics and Global Affairs and an affiliate of the Economic Growth Centre at Yale University, and Tristan Reed, an economist with the World Bank's Development Research Group, said that while trading exclusively with 'friendly' countries may imply greater resilience to geopolitical risks - at least in the near term - the concept of friendship is itself subject to 'constant change'. It may, they said, lead to less resilience to other types of shocks, such as the recent health shock.
SeaNews Turkey
After a decline in the second half of 2022, trade made a strong recovery in Q1 2023, adding US$100 billion compared with Q4 2022. This growth was primarily driven increased trade in road vehicles and pharmaceuticals, said UNCTAD, the Geneva-based United Nations Conference on Trade and Development.
Similarly, the trade in the services sector displayed resilience throughout 2022 and experienced 2.8 per cent growth in Q1 2023, partly attributed to the ongoing rebound in tourism and travel following the Covid crisis.
Various negative factors contribute to this outlook, including geopolitical tensions, the war in Ukraine, weakening global economy, potential rise in trade restrictive measures, slowing industrial output, inflationary pressures, and concerns of debt sustainability.
On a yearly basis, both imports and exports of developing countries experienced an average growth rate of six per cent. However, excluding East Asian economies, the growth rate for developing countries reached 14 per cent. While most regions displayed positive trade growth on a yearly basis, trade growth in East Asia remained below average.
On a quarter-to-quarter basis, Q1 2023 saw a decline in trade values in most regions, except for the Pacific region, North America, and Africa. Notably, intra-regional trade in Africa outperformed other regions, showing a three per cent increase.
During 2022 and Q1 2023, the geographical proximity of international trade remained relatively stable, indicating a lack of significant nearshoring or far-shoring trends.
The war in Ukraine, the US-China trade decoupling, and Brexit played significant roles in shaping these bilateral trade trends.
The International Monetary Fund has warned of the risks of 'friend-shoring'. Pinelopi Goldberg, Elihu Professor of Economics and Global Affairs and an affiliate of the Economic Growth Centre at Yale University, and Tristan Reed, an economist with the World Bank's Development Research Group, said that while trading exclusively with 'friendly' countries may imply greater resilience to geopolitical risks - at least in the near term - the concept of friendship is itself subject to 'constant change'. It may, they said, lead to less resilience to other types of shocks, such as the recent health shock.
SeaNews Turkey