IfW Kiel launches new global trade indicator – also for emerging countries

09:00 by Hubert Fromlet, Kalmar

The Kiel Institute for World Economics (IfW Kiel) has been a leading institution for research on international trade and economics for many years. A lot of interesting papers and forecasts have been published during a long time. When I recently re-visited the website of the institute, I found the official introduction of the newly developed “Kiel Trade Indicator” (KTI).

https://www.ifw-kiel.de/topics/international-trade/kiel-trade-indicator/

Description of the indicator

KTI summarizes exports and imports of 75 countries to a global index and also for the EU as a subgroup. But trade numbers for exports and imports can also be found for each of these 75 countries – with new updated numbers around the 3rd and the 20th of every month. A forecast for the following month is included.

Particularly interesting is the approach of applying algorithm with machine learning and AI in a real-time environment. Goods-transporting ships are registered when they are entering or leaving 500 ports worldwide. Furthermore, another 100 ship movements in maritime regions are added.

In my view, good transparency should be applied in the future by IfW Kiel when quality evaluations finally take place – particularly since a new and modern modeling technology is applied. How does this approach work?

Current situation somewhat dampened

Some weakening export developments compared to the previous month could be observed in May both globally (-1.4%) and for the EU (-4,7%), the United States (-2.2%), Germany (-1,7%), China (-1.0) and India (-2.4%).

The Kiel economists explain the currently slightly shrinking world trade with rising commodity prices and shortages of certain industrial products, possible also with rising costs for transports.

However, positive export numbers for June are, for example, predicted for   Italy, Poland, Germany, Spain, Canada, Japan and India – but not for the U.S. and China. Summarizing these impressions, one should conclude that world trade will remain dampened in June. But this does not rule out a more significant upswing of global trade in the second half of 2021.

 

 

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University
Editorial board

 

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