Advanced economies to drive global trade, emerging markets' growth patchy: HSBC
ADVANCED economies are expected to be the main growth drivers in global trade this year, as they benefit from higher US demand for imports as a result of a stronger dollar, HSBC said in its global overview report released on Friday.
The bank expects world trade to receive a boost from a strengthening recovery in the eurozone. With the single currency bloc accounting for about a quarter of international trade, its chronic weakness over recent years has been a serious drag on world trade growth.
It believes that Japan's exports appear to be finally getting some support from the weaker yen, although any benefit may be coming largely at the expense of Japan's trading partners, as import volumes have continued to contract.
As for emerging market economies, the near-term growth outlook remains patchy. "In particular, China's economic slowdown and maturation of its domestic production capabilities are making it a tough export market for many of its key Asian trading partners, while the downward pressure on commodity prices is proving a difficult environment for large commodity exporters,'' HSBC said.
But the medium-term outlook for emerging markets appears brighter, as many of economies benefit from favourable demographic trends as well as the ongoing convergence of average incomes towards levels in the advanced economies.
"This implies that export growth for emerging markets, led by the Asia region, will accelerate over the next few years and outpace growth from the advanced economies,'' HSBC said.
Among the 25 economies covered by the HSBC Global Trade Forecast, growth in trade is forecast to be strongest in India and Vietnam over the medium term; the value of merchandise exports from these economies is forecast to expand at an average rate of around 12 per cent a year in 2015-30.
Other countries in emerging Asia are expected to post somewhat slower export growth, albeit still strong compared with most other regions in the world.
HSBC expects machinery and transport to be the main driver of merchandise trade growth over the medium term.
"Demand for these capital goods is likely to be particularly strong in emerging markets as business investment recovers,'' it said.
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