IE414A - World Trade - Imports & Exports YoY Change

 

The focus of our featured chart this week is world trade. Many countries rely on imports and/or exports in order to sustain economic growth, so monitoring world trade volumes is a great way to assess the overall health of the global economy.

Every month, the World Trade Monitor is released by the CPB Netherlands Bureau for Economic Policy Analysis. This report contains information about the total volume of imports and exports in both OECD and emerging market economies, covering about 97% of total world trade.

The top clip of the chart shows the change in world imports from the prior year (the year-to-year growth rate). The bottom clip shows the same thing but for world exports. In theory, the two should be the same, since for every global export there is a corresponding import; however, they differ slightly due to minor reporting discrepancies. Nonetheless, they track each other very closely, so looking at either series will give you a good sense of overall world trade.

Looking at recent history, we see a significant dip in world trade volumes last year due to the pandemic. However, the good news is that trade volumes have bounced back strongly. So strong, in fact, that the roughly 25% year-to-year change in world imports and exports is the fastest rate on record, surpassing even the bounce back from the 2008 Financial Crisis.

 

This is intended for informational purposes only and should not be used as the primary basis for an investment decision.  Consult an advisor for your personal situation.

Indices mentioned are unmanaged, do not incur fees, and cannot be invested into directly.

Past performance does not guarantee future results.