January 18, 2024 (MLN): International trade flows from many frontier markets continue to experience weakness, as annual growth rates of exports and imports recorded sustained declines in 2023, says Fitch Ratings.
A slowdown in consumer spending in Europe, weak domestic demand in China, and tight financial conditions in emerging and developed markets have contributed to the sharp drop in global trade flows, as highlighted in Fitch Ratings’ latest Frontier Vision chart pack.
Ongoing disruptions to important global trade routes also risk further weakness in global trade flows, and we expect US consumer spending to slow in 2024.
The growth in the value of trade flows to and from frontier markets fell markedly in 2023, reversing the run-up in trade following the post-Covid-19 reopening in 2021-2022.
In many cases, export and import values have recorded a sharp contraction in 2023.
According to the latest data, in the year to September 2023, both export and import values recorded strong contractions in Angola, Ethiopia, Nigeria and Senegal. Vietnam’s trade, which also contracted in 3Q23, was able to recover in the final three months of 2023.
In addition, export growth declined in Costa Rica, El Salvador, Gabon, and Georgia. In Jordan, export and import volumes have been declining since late 2022, as import volumes contracted by 4.4% YoY on average in the three months to September.
Current disruptions to container shipments in the Red Sea are creating additional risks to vital maritime trade routes.
