This year’s ICC Global Survey on Trade and Finance – titled “Rethinking Trade and Finance” – notes that after a year of upheavals, annual trade volume growth for 2011 was 6.6%, slightly above forecasts by the World Trade Organization. After positive growth prospects at the beginning of the year, a series of global shocks including the Arab Spring, the tsunami in Japan and the continuation of the global debt crises, resulted in an uneven performance for the year.
The survey, which provides some of the most important international data on trade finance, suggests the current environment is dampening prospects for 2012, with annual trade growth forecast at 5.2% this year, increasing to 7.2% in 2013, according to the report.
Developing countries continued to lead trade growth in spite of the slowdown towards the end of the year. South Asia exports, driven by soaring Indian trade with China, outperformed other developing regions in the first three quarters of 2011, but subsequently plummeted.
The report – in which representatives of 229 banks in 100 countries, a sharp increase on last year, took part – reveals that China’s trade experienced particularly volatile growth throughout the year, and exports from East Asia have fallen. Many major developing countries in the region are experiencing a slowdown in growth due to a tightening of domestic policy initiatives introduced between late 2010 and early 2011 to combat high inflation.
The Eurozone meanwhile was strongly affected by the financial and economic crises, with the highest annual decrease in export traffic, of -5.85%.
Overall, the responses to the survey appear to confirm that the financial problems that were impacting trade as a whole in 2009 and the early part of 2010 have diminished to some extent, but a number of residual issues need to be addressed.
A total of 59% of respondents that had experienced an increase in demand noted that they had been able to satisfy their customers’ needs to a large extent.
All the development banks increased their limits and resources last year, and the report suggests this is likely to continue. Respondents, including many ICC Banking Commission members, underscored the importance of targeted temporary financing and, in some cases, agreements with international banks to address liquidity shortages and problems of risk perception.
Thierry Senechal, ICC Senior Policy Manager, Banking Commission said: “The ICC Global Survey 2012: Rethinking Trade and Finance will be a useful tool for both policymakers and senior executives in financial institutions worldwide, enabling them to better understand the broad challenges that must be tackled to ensure that trade finance continues to play a vital role in the financing of global trade.”
ICC Global Survey 2012: Rethinking Trade and Finance [PDF]