The International Monetary Fund’s (IMF’s) latest World Economic Outlook has devoted an entire chapter to the slowdown in global trade. The IMF report finds that overall weakness in global economic activity, in particular investment, has been the primary restraint on trade growth, accounting for up to three-fourths of the slowdown.
Other factors, it says, include the waning pace of trade liberalization, an increase in protectionism and a decline in the growth of global value chains. The report says that a prolonged period of slowdown in global trade will call into question the strategy of export-led growth that many developing countries have followed.
Chart 1 shows the sharp decline in both price and volume of the imports of goods and services across all countries. Chart 2 shows how the real import growth of all categories of products has declined in the 2012-15 period compared to the 2003-07 period.
Emerging market household debt soars
Household debt in emerging markets has been steadily rising. According to a study by the Institute of International Finance, the debt per adult is around $3,230, which was 60% higher than the 2010 level and almost three times higher than a decade ago.
The total household debt touched $8.3 trillion at the end of the first six months of the calendar year. This comprised nearly 35% of the gross domestic product, in the sample of about 20 emerging market economies. The study adds that the largest rise was in China, Saudi Arabia, Thailand and South Korea.
Subdued cement output growth in August
Volumes in the Indian cement industry likely grew to nearly 22 million tonnes in August, indicating low single-digit growth over a year ago, according to ICICI Securities Ltd.
Volumes in south India are likely to have improved by 5-6% over a year ago, while those in north and central regions are likely to have declined by 5-7% over a year ago due to heavy rains and sand mining issues.