Global Trade shifts from globalization toward fragmentation : QNB
Second, QNB considered the 2008 global financial crisis a turning point in the evolution of global trade, after which it moved from a period of rapid expansion into an era of slower trade growth.The r...
QNB has observed a shift in global trade from rapid globalization to a more fragmented state, spanning three distinct phases. Following the 2008 financial crisis, the pace of trade growth slowed, marking the onset of slowbalization. The report highlights the maturation of global value chains and the transition of major economies like China towards domestic demand-driven growth as key factors in this shift.
In recent years, rising protectionism has intensified, with the number of trade-restrictive measures nearly doubling between 2010 and 2020, and the value of imported goods affected by new tariffs more than quadrupling. This has led to heightened tariffs and trade-policy uncertainty, far exceeding historical norms. The bank predicts that global merchandise trade growth, which grew by nearly 3% in 2024, is expected to slow sharply.
Global trade's shift towards fragmentation is increasingly influenced by geopolitical considerations, redirecting commerce to more reliable partners. This evolution has significant implications for global growth, prices, and the development prospects of emerging economies that have depended on open markets for growth and narrowing the gap with advanced economies.
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