Much of the slump was due to a slowdown in China and other emerging economies. The start of 2016 sports a similar pattern.
Weaker demand from emerging markets made 2015 the worst year for world trade since the aftermath of the global financial crisis, highlighting rising fears about the health of the global economy.
The value of goods that crossed international borders last year fell 13.8 per cent in dollar terms — the first contraction since 2009 — according to the Netherlands Bureau of Economic Policy Analysis’s World Trade Monitor. Much of the slump was due to a slowdown in China and other emerging economies.
The new data released on Thursday represent the first snapshot of global trade for 2015. But the figures also come amid growing concerns that 2016 is already shaping up to be more fraught with dangers for the global economy than previously expected.
Deflation in Global Trade/strong>
A pair of charts highlights the massive discrepancy between volume and price.
World Trade by Value
End of the Line
Before the 2008 crisis global trade grew at as much as twice the rate of global output for decades. Since 2011, however, trade growth has slowed to be in line with — or even below — the broader growth of the global economy, prompting some to raise questions about whether the globalisation that has been such a dominant feature for decades has peaked.
Keynesian stimulus has hit the end of the line.
Mike “Mish” Shedlock