ECB: Weak trade is the ‘new normal’

Trade is likely to remain weak in the coming years, according to a report by the ECB.

While global trade expanded, 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 yesterday.

The increasing importance of emerging economies, whose growth is typically less trade intensive, as well as diminishing structural factors have lowered trade ‘elasticity’ on a global and national level, according to the report.