KUALA LUMPUR (Aug 12): S&P Global Market Intelligence said a slowdown in global trade is expected to continue in the following quarters, with a potential contraction later this year in some of the economies.

In a statement on Friday (Aug 12), the firm said the recent slowdown in the global economy is reflected in its global trade projections, but its depth is incomparably lower than the one in the second quarter of 2020, which was related to the first wave of Covid-19.

It said despite the slowdown, recent values and trends were above the levels observed before the pandemic.

S&P Global Market Intelligence senior economist Jakub Kwiatkowski said the firm expects the war in Ukraine to decrease global trade by one to 1.5 percentage points.

“However, despite a visible slowdown in recent monthly trade data, global trade growth is, at this point, still far from being negative.

“We expect global value chain disruptions to settle down in the second half of 2022 and in 2023,” said Kwiatkowski.

S&P Global Market Intelligence said the real value of global trade is expected to grow 0.3% year-on-year (y-o-y) to US$20.3 trillion (RM90.2 trillion) in 2022, and 2.7% y-o-y to US$20.8 trillion in 2023.

It said the global merchandise trade volume is forecast to decline 0.2% y-o-y to 15 billion metric tons in 2022, and increase by 2.1% y-o-y to 15.3 billion metric tons in 2023.

The firm said the most important factors impacting international trade recently were the pandemic, the war in Ukraine, as well as inflationary pressure in the world and the global economic slowdown, with the threat of a recession in some economies.

Meanwhile, it said the trade contraction in 2020 was less significant compared to that of the financial crisis from 2007 to 2009, while the increase in 2021 was about the same as in 2010.

It said similar to the post-crisis period, in the long run, a return to a stable growth path is expected.

Over the period of 2022 to 2035, global trade is forecast to grow at a compound annual growth rate of 2.4% in value terms, and 2.3% in volume terms, it said.