Under the influence of multiple factors such as the global economic slowdown, weak demand and soaring energy costs, many countries have experienced serious imbalances in imports and exports.
At the same time, due to the influence of strong US dollars and other factors, the trade deficit of many countries has intensified. Industry insiders said that as the Federal Reserve radically raises interest rates, the global monetary policy path shows a more obvious trend of differentiation, which will make the exchange rate of the US dollar still high recently and strengthen the impact on global trade.
Not only exporters such as the United States, Germany, Japan and South Korea are also trapped in the anxiety of the trade deficit.
The U.S. trade deficit narrowed significantly in November.
On the 5th, the U.S. Department of Commerce reported that the U.S. trade deficit narrowed by 21.0% to $61.5 billion in November, the lowest level since September 2020. The narrowing of the deficit is the largest since February 2009, reflecting the lowest decline in commodity imports in 13 months.
Overall, the sharp fluctuation of the U.S. trade deficit in 2022 masked the steady growth of the country’s economy. Now the narrowing of the trade deficit signals that economic growth in the United States and the world will slow down in the coming months.
South Korea reappears its annual trade deficit after 14 years
Recently, South Korea’s Ministry of Industry, Trade and Resources released a report showing that South Korea’s trade deficit in 2022 was $42.7 billion, a record high. This is the first time that South Korea has experienced an annual deficit after a global financial crisis after 14 years.
According to the data, South Korea’s exports increased by 6.1% and imports increased by 18.9% in 2022. Compared with 2021, South Korea’s exports increased by 25.8% year-on-year, and the country’s export growth rate experienced a sharp decline.
South Korea’s exports have always been regarded as a barometer of global trade. Therefore, the country’s annual trade deficit inevitably raises concerns, especially the chips, monitors and refined oil it produces, which are key products for export.
Japan’s trade deficit hit a new high in the same period in nearly a decade in November.
Recently, the November trade statistics released by Japan’s Ministry of Finance showed that Japan had a trade deficit for 16 consecutive months due to the depreciation of the yen and soaring energy prices. The trade deficit that month reached 2.0274 trillion yen (1 US dollar is about 135.5 yen), surpassing the high in November 2013.
Due to the depreciation of the yen and soaring energy prices, imports increased by 30.3% year-on-year to 10.8649 trillion yen, which was higher than exports.
Germany’s trade surplus expanded to 10.8 billion euros in November
On the 5th, data released by Destatis showed that Germany’s adjusted trade surplus in November was 10.8 billion euros, up from 6.8 billion euros in October and exceeding market expectations.
Germany’s exports fell 0.3% to 135.1 billion euros in November; imports fell 3.3% to 124.4 billion euros, which may reflect the decline in domestic demand, but also reflect the impact of falling energy prices.
At present, many international institutions predict that global trade will slow down in 2023.
The WTO predicts that the volume of global merchandise trade will increase by 3.5% in 2022, while the volume of global merchandise trade will grow by only 1.0% in 2023, which is far lower than the previous estimate of 3.4%.
The reason is that deteriorating economic conditions and rising uncertainty led to a slowdown in trade in the second half of 2022. At the same time, the rising prices of intermediate and consumer goods in international trade in the second half of the year further raised concerns about the continued global inflation.
UNCTAD believes that the prospects for global trade are uncertain, and the impact of negative factors seems to be outweighing the positive factors. Economic growth expectations in 2023 have been lowered due to the impact of high energy prices, rising interest rates, persistent inflation and the Russian-Ukish conflict.
Previously, the IMF lowered its global economic growth forecast for 2023 by 0.2 percentage points to 2.7%.
On January 1, Georgieva, Managing Director of the International Monetary Fund, warned that the global economy would face a “difficult year”, which was more difficult than the previous year. We expect one-third of the world’s economies to be in recession.
In addition, she said that economies, including the United States and the European Union, are slowing down at the same time.
In addition, according to the manufacturing purchasing manager index released on the 2nd, the data for Europe, Turkey and South Korea as a whole are negative; in the data released on the 3rd, the situation in Malaysia, Vietnam, the United Kingdom, Canada and the United States is equally bad.
In addition to the forecast of the IMF, Wall Street predicts that the global economy may have “ups and downs” in the first half of 2023 after the biggest decline in global markets suffered from the 2008 financial crisis last year.
Analysts at investment bank Jefferies predict that the global economy will have a recession this year, but Asia is expected to avoid a complete recession.
Due to the high inflation rate and tight market conditions, the global economic situation continues to deteriorate. However, Asia may be the best of the bad ones and will avoid an absolute recession.
Jeffrey’s analyst said, “In the past Internet bubble burst and the financial crisis, Asia (economy) rebounded rapidly, and we expect it to do the same in 2023.”
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Post time: Jan-06-2023