Page 13 - November/December-2019

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Global trade slips to lowest

in recent history, further

stagnation projected

The global trade has been recorded as the lowest in towards more consumption and services. Whereas,
the recent history with estimated global GDP growth India is set to grow rapidly as its growth model is
to have been 2.9% this year and projected to remain different. However, India’s contribution to global
around 3% for 2020-21, down from the 3.5% rate trade growth will not be enough to substitute for
projected a year ago. Things are not looking to China as a global engine for traditional manufactur-
pick-up in the coming years as economic slowdown ing.
is predicted to continue for the foreseeable future.
New technologies and their adoption is also playing
Major economic powers are also seeing a slowdown a big role with regards to global economic changes.
as the GDP growth of the United States is expected Digitalisation is transforming finance, business
to slow to 2% by 2021. Japan and the EU is expect- models and value chains, through three main
ed to be around 0.7 and 1.2% respectively. China’s channels: investment, skills and trade. So far, only a
growth is estimated to continue sliding down to small fraction of businesses appear to have
around 5.5% by 2021. Other emerging-market successfully adopted the strong productivity poten-
economies are expected to recover only modestly. tial of digital technologies, which partly explains why
digitalisation has been unable to offset other head-
Trade restrictions are also playing a major role in the winds on aggregate productivity.
economic slowdown. Around 1,500 new trade
restrictions have been put in place by G20 econo- There is a need for reducing policy uncertainty,
mies since 2008 and this trend continues with a rethinking fiscal policy, and acting vigorously to
surge in trade restrictions in the past two years. address challenges raised by digitalisation and
climate change. A look at and changes in all such
The Chinese economy is also structurally changing, factors has the potential to reverse the current
rebalancing away from exports and manufacturing economic trajectory and to ensure future growth.

November/December 2019