By Revin Mikhael D. Ochave, Reporter
THE World Trade Organization (WTO) projects trade growth in the Association of Southeast Asian Nations (ASEAN) to grow by more than 3% in volume terms this year.
WTO Chief Economist Ralph Ossa told reporters at a seminar in Bangkok last week that trade — the sum of exports and imports — is expected to continue outperforming the rest of Asia.
“If we use ASEAN countries as comparison, we see that their rates of merchandise trade volume growth tend to be quite close to but slightly higher than Asia overall. The average annual growth of ASEAN exports since 2010 was 4.4%, slightly higher than the 4.0% growth in Asia. Meanwhile ASEAN’s average import growth of 4.7% over the same period was a percentage point higher than Asia’s,” Mr. Ossa said.
“If this tendency holds up, we should expect export and import volume growth of over 3% in 2023,” he added.
Mr. Ossa said one of the merchandise trade developments in ASEAN is the declining share of intra-regional trade.
“Intra-ASEAN trade in 2022 was worth nearly $450 billion, up 64% compared to 2016 in nominal terms. Despite this rise, the share of intra-regional trade in the group’s exports dropped from 24% to 14% while the share of intra-imports fell from 25% to 15% over the same period,” Mr. Ossa said.
He attributed the decline in intra-regional trade to the rise in ASEAN trade with China.
“Part of the reason for the decline is increased ASEAN trade with China, exports to which grew 98% in nominal dollar terms and imports from which rose 81% between 2016 and 2022. This growth came at the expense of trade with Europe, exports to which rose 39% and imports from which grew 31%,” Mr. Ossa said.
“The growth in imports from North America was roughly in line with the ASEAN average (+60%) while growth in exports to North America was stronger than average (+90%),” he added.
Mr. Ossa said merchandise export volume growth for Asia could hit 2.5% in 2023 from 0.6% in 2022, and “pick up substantially” in 2024.
“Merchandise export volume growth (could) accelerate to 4.7% in 2024. To put this in context, remember that the average rate of export growth in Asia since 2010 was 4.0% while the average rate between 1990 and 2008 was 9.1%,” Mr. Ossa said.
“Exports in 2023 from Asia will be weighed down by weak demand in other regions, particularly North America and Europe, where imports are expected to stagnate or decline slightly by minus 0.1% and minus 0.6%, respectively,” he added.
For imports, Mr. Ossa said that Asia’s merchandise import volumes “should grow by 2.6% this year… but weaker than the projected 4.2% gross domestic product (GDP) growth rate for 2023. However, in 2024, Asian import volume growth of 5.2% should exceed the region’s expected GDP growth of 4.3%,” Mr. Ossa said.
“In general, imports tend to fluctuate more strongly than GDP, in part due to the higher share of pro-cyclical spending on machinery and consumer durables in trade compared to GDP,” he added.
The WTO previously estimated that world merchandise trade volume could post slower growth of 1.7% in 2023 from 2.7% in 2022, but could accelerate to 3.2% in 2024.
“These projections are premised on a global market-weighted GDP growth of 2.4% in 2023 and 2.6% in 2024. Trade and output growth in our assessment continue to be weighed down by the geopolitical tensions in Ukraine, stubbornly high inflation, monetary policy tightening and financial uncertainty,” Mr. Ossa said.