Despite what you may think, it’s not due to protectionism.
World Trade has been on our worry-list for a while, most recently in December [World Trade Falls to 2014 Level, just in Time for a ‘Trade War’]. Why has world trade refused to boom recently? And it wasn’t just last year. But last year was particularly crummy. Lackluster global demand gets blamed. But that’s using a broad brush to sketch a troublesome development.
Now the alarmed World Bank, in its report, Trade Developments in 2016 (PDF), barely blames the usual suspects for this lackluster global demand, but identifies a new and dominant one: ‘policy uncertainty.’
It points out that 2016 was the fifth year in a row of ‘sluggish trade growth.’ 2015 had already been the weakest year since 2009, when global trade collapsed as a result of the Financial Crisis. But 2016 was even worse than 2015.
World trade is devilishly hard to quantify, and so the estimates for 2016 vary:
This post was published at Wolf Street by Wolf Richter ‘ Feb 21, 2017.