Global trade outlook - February 2023 (HTML executive summary)
Published 28 February 2023
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This executive summary duplicates that in the Global trade outlook - February 2023 (PDF full report).
Economic backdrop
Global gross domestic product (GDP) will continue to expand over the coming decades, but at a slowing rate. Growth is projected to fall from 2.7% per year prior to the pandemic, to 2.3% in the 2030s and 1.8% in the 2040s. Slower population growth and ageing workforces are partly to blame for this decline.
The world바카라 사이트s economic centre of gravity will continue to shift eastward. Seven of the largest emerging economies are projected to overtake the G7 in economic size during the 2030s.
The industrial structure of the global economy is expected to gradually become more services-oriented, as rising incomes in emerging markets shift spending patterns. By 2035, service sectors are expected to account for 77% of global GDP, up from 75% in 2021.
As living standards rise, the number of high-income countries could go up from 58 in 2021 to 90 by 2050.Β The world바카라 사이트s middle class will also be a key source of demand growth. The number of middle-class consumers could almost double to 3.5 billion by 2050, with 90% of growth from outside Europe and North America.
The UK was the sixth largest economy in the world in 2021 and is projected to remain in that position out to 2050. As the rest of the world grows richer, the UK바카라 사이트s relative economic weight will tend to fall 바카라 사이트 the UK바카라 사이트s share of global GDP is projected to fall from 3.3% in 2021 to around 2.7% by 2050. However, the opportunities for the UK to grow via trade will increase.
Economic backdrop 바카라 사이트 what바카라 사이트s changed since 2021?
The outlook has dimmed. Surging inflation 바카라 사이트 caused in part by pandemic-related supply disruptions and higher commodity prices from the war in Ukraine 바카라 사이트 are squeezing living standards. Longer-term growth has also been marked down due to a major shift in China바카라 사이트s demographics.
Weaker growth in China will slow the eastward shift in economic gravity. China is still destined to overtake the US, but its progress is slowing. China바카라 사이트s population is now thought to have peaked in 2022 and its forecast for 2050 has been cut by 90 million people.
The war-induced spike in commodity prices has caused the value of commodity-intensive goods to surge. This will squeeze spending on other sectors in the short-term, temporarily interrupting the decades-long servicification of the global economy, which will only gradually re-emerge.
The weaker economic outlook will not materially affect the growth in the number of people in the global middle class, but it will affect their average income levels. The average global citizen will be $900 poorer per year by 2050 (in real terms) as a result of the downgrades to the outlook.
The UK바카라 사이트s economic prospects have been downgraded in the short term as global demand has weakened, inflation has surged, and living standards have been squeezed. By 2050, the downward revisions to UK growth closely match those of the world economy, meaning the UK바카라 사이트s relative long-term prospects do not shift materially. The UK is expected to remain the 6th largest economy in the world.
The trade outlook
Global trade is projected to grow broadly in line with global GDP over the next 30 years. By 2050, it is expected to double in real terms and almost quadruple in dollar terms to reach close to $100 trillion.
Emerging economies are likely to account for a growing share of trade as economic power shifts east. Seven of the largest emerging economies are projected to match the G7바카라 사이트s import market size by 2050.
The industrial structure of global trade is very different to GDP 바카라 사이트 goods sectors dominate trade. But global trade is expected to gradually become more services-oriented over time. Service sectors are expected to account for 28% of global trade by 2035, up from 25% pre-pandemic.
Global trade is concentrated among high-income countries. In 2021, almost 70% of global import demand came from the world바카라 사이트s 58 high-income countries. By 2050, as prosperity spreads and more countries graduate to high-income status, this share could rise to 84% of global import demand.
The UK should remain one of the top 10 trading nations out to 2050. UK exporters are well-placed to capitalise on an expanding global middle class, as richer populations tend to buy high-value goods and services that UK businesses specialise in. But rapid trade growth elsewhere means that, if past trends continue and absent policy changes, the UK share of global exports is likely to fall. By 2050, the UK is expected to account for 2.5% of global exports, down from 3.1% in 2021.
Trade outlook 바카라 사이트 what바카라 사이트s changed since 2021?
As with GDP, global trade prospects have deteriorated. Surging inflation has curtailed near-term demand, while downgrades to China바카라 사이트s growth prospects and, to a lesser extent, Russia바카라 사이트s economic isolation from the West weigh on trade growth further out.
Growth prospects among emerging economies have shifted slightly 바카라 사이트 China and Russia are worse off, while India, Asia Pacific and the Middle East are better off. This raises the gains of agreeing trade deals with those latter three regions (as the UK is attempting with India, the CPTTP and GCC).
Higher commodity prices (from the war in Ukraine) and a weak travel sector (from the pandemic) will temporarily cause global trade to become more goods intensive. But as these shocks dissipate, the long-term reorientation of global trade towards services should resume.
Slower economic growth means there will be around 130 million fewer people on 바카라 사이트very high incomes바카라 사이트 by 2050 than previously thought. This group of consumers 바카라 사이트 who have the same purchasing power as the average UK citizen 바카라 사이트 are a key source of demand for high-value imports. Fewer rich consumers means the market for consumer goods will be more competitive.
Changes to the UK바카라 사이트s trade prospects broadly track those of the world at large, ensuring it maintains its relative position in the global economy. But the outlook remains highly uncertain. While the UK has many sectors of strength, it has lost ground in others recently (for example the automotive sector). In the long term, UK trade prospects will depend on whether UK firms can adapt to a fast-changing and increasingly competitive global trading environment.