- Our forecasts indicate that growth in goods trade will recover only very gradually. Moreover, significant risks remain that world trade growth will continue to undershoot central forecasts in the near term, especially given ongoing adjustments in the global economy.
- In contrast, our projections show services trade continuing to grow robustly. Notwithstanding the expected cyclical recovery of trade in goods, this implies that the share of services in global trade will continue to rise, edging up from 23% to 24% in 2020, with a further increase to 25% by 2030.
About the HSBC Trade Forecast – Modelled by Oxford Economics
Oxford Economics has tailored a unique service for HSBC which forecasts bilateral trade in goods and services, based on HSBC’s own analysis and forecasts of the world economy. A top-down approach is employed, with Oxford Economics’ suite of models used to ensure consistency between HSBC’s forecasts for economic growth and exchange rates in key countries and the more granular projections for bilateral trade flows presented here.
Oxford Economics employs a global modelling framework, with headline bilateral trade forecasts constructed as a function of demand in the destination market and the exporter’s competitiveness (as measured by unit labour costs adjusted for the exchange rate). Exports, imports and trade balances are identified, with both historical estimates and forecasts for the periods 2016-20 and 2021-30.
These headline bilateral trade forecasts for goods and services are also disaggregated by sector, using Oxford Economics’ Industry forecasts to inform future production trends and taking into account the historic relationship between output and exports in each sector, by country:
- For trade in goods, sectors are classified according to the UN’s Standard International Trade Classifications (SITC) system at the two-digit level and grouped into 30 sector headings.
- For trade in services, we identify five broad sectors: B2B and other services, tourism & travel, transport & distribution, financial services, ICT services and construction.
Oxford Economics produces a global report for HSBC, as well as country specific reports on the following 23 countries: Argentina, Australia, Bangladesh, Canada, China, Egypt, France, Germany, Hong Kong, India, Indonesia, Ireland, Japan, Malaysia, Mexico, Poland, Saudi Arabia, Singapore, Turkey, UAE, UK, USA and Vietnam. The analysis also includes trade with Brazil and Korea for a total sample of 25 key trading nations.
All trade flows data are reported in nominal US-dollar value terms (using market exchange rates) unless otherwise specified. This means that fluctuations in a country’s terms-of-trade due to relative price and exchange rate effects are reflected in the data.
The projections assume unchanged national policies and do not take account of potential new reforms, whose implementation remains uncertain. Thus, any effects from regional or sectoral trade agreements would be in addition to the results shown here.
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