Amsterdam, 30 May, 2017 - Atradius’ global economic outlook is more optimistic than before but with caution as underlying structural issues are unresolved and uncertainty has risen.
Following the weakest year for the global economy since the financial crisis, growing only 2.5%, nearly all indicators point to higher growth of 2.9% in 2017 and 2018. Trade is recovering, consumer spending is robust, investment is picking up slightly, and overall sentiment is increasingly positive. Advanced markets are contributing more strongly to global growth, underpinned by strong private consumption growth and increasingly higher investment. After a difficult year, emerging markets are also seeing stronger growth, supported by higher commodity prices and better policymaking.
“Trade growth is emerging from the doldrums,” said John Lorié, global chief economist at Atradius. “After slowing to only 1.3% in 2016, stronger economic outlooks across both emerging and developed market economies are promising a more positive outlook for global trade growth in 2017. We now expect the volume of trade to expand 3.2% this year.”
However, the world economy is not out of the woods yet and an unusual amount of uncertainty is clouding the outlook. While sentiment is high and forward-looking indicators point to higher trade growth, it is unlikely to reach its pre-crisis growth level of around twice GDP growth. China is turning towards more local production and rebalancing to consumption from investment, cooling down one of the world’s greatest engines of trade demand. Furthermore, the global value chain networks have largely been established and are instead now turning more local. Trade liberalisation efforts have stalled, especially in advanced markets, as evidenced by the scrapping of TPP and TTIP. Anti-trade rhetoric is also driving increasing uncertainty that could constrain long-term growth.
Lorié adds: “The latest upturn in global trade is on the back of positive cyclical developments. Structural developments, on the other hand, such as Chinese rebalancing and less room for growth from factors like global value chain fragmentation will keep trade growth subdued. Moreover, while the 2017-2018 outlook for global trade is brighter, it could prove lower than expected due to high economic policy uncertainty, stemming from US protectionism.”
Read more about the global economic environment and gain insights into prospects and risks around the world in our May Economic Outlook.
Atradius provides trade credit insurance, surety and collections services worldwide through a strategic presence in 50 countries. Atradius has access to credit information on 200 million companies worldwide. Its credit insurance, bonding and collections products help protect companies throughout the world from payment risks associated with selling products and services on trade credit. Atradius forms part of Grupo Catalana Occidente (GCO.MC), one of the leading insurers in Spain and worldwide in credit insurance.
For further information:
Atradius Corporate Communications
Tel.: +31 20 553 2047