ECB Says Weak Trade Is the ‘New Normal’ in Post-Crisis World
- Different factors have led to lower trade-income elasticity
- ECB expects global trade to be at parity with global GDP
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Trade is likely to remain weak in the coming years, according to a report by the European Central Bank.
While global trade grew on average roughly twice as fast as global output prior to the financial crisis, the ratio of imports to world GDP has largely stagnated over the last five years and will probably remain at current levels, the ECB wrote in an economic bulletin published Tuesday. The increasing importance of emerging economies, whose growth is typically less trade intensive, as well as diminishing structural factors have lowered trade elasticities on a global and national level, according to the report.