BMI View: In the context of sluggish economic growth, weak commodity prices and depressed businessactivity, we anticipate trade to modestly grow over the medium term. Lacklustre trade forecasts will restraingrowth across all freight modes. Road freight will be the only bright spot across all freight modes. Demandfor containerised goods underpinned by resilient consumer demand will support road, rail and shippingfreight. Weak long term growth fundamentals will continue to be a challenge, with growth only expected toimprove significantly in the long term.
Key Updates And Forecasts
We forecast trade to grow at an average annual growth rate of 0.8% over the medium term, which is slowercompared to the 5 year trailing average of 2.2% real growth. In nominal terms, growth will average 3.8%over the medium term to reach USD213.1bn in 2021 from USD178.5bn in 2016. Growth will be importdriven, with exports expected to grow sideways, in real terms. Imports are set to expand at an average of2.1% annually over the medium term while exports are forecasted to shrink annually by 0.5%.
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