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

2 June, 2021

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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Brazil in big corona troubles – next year’s presidential election the only hope?

6 May, 2021

Brazil’s political, economic and social developments remain a mass. Currently, there is almost no light on the horizon.

The social misery (apart from the – since many years back – well-known problems): Covid-19 is a nightmare for this giant country, causing mountains of pain and sorrow. Officially, Brazilian infection (incidence) numbers are currently in relative terms even lower than in Sweden – but most probably much higher than reported (officially 15 million infections which is 7 % of the whole population and more than 400 000 deaths; 7 % is also the share for  the fully vaccinated people https://www.worldometers.info/coronavirus/).

The political misery: Jair Bolsonaro’s presidency has been widely failing, probably also to a high extent in the eyes of his conservative supporters from the presidential election in 2018. Is does not either seem probably that the Brazilian corporate sector can be happy so far with Bolsonaro’s efforts and results. His empathy for the terrible covid-19 disease must be regarded as completely insufficient – despite the fact that he personally was infected as well.

Consequently, many Brazilians see their hope for a better future in a promising change of president in October 2022, hopefully beyond the acute covid-19-crisis. What Brazil primarily needs are major improvements of institutions and education, now and in the longer run.

Can former union leader and Brazilian president Luiz Inácio Lula da Silva (2003-2011) really be able to run for presidency in 2022 year’s elections? He may be eligible again after the Brazilian Supreme Court justice had turned down severe corruption charges against him. Anyway, during his time as a president, Lula achieved some progress in education and socially – but to what extent can he leave the previous accusations of corruption behind?

The economic misery: Looking at the current economic situation, does not make things better. There is no preliminary result for GDP in Q1 yet – but survey results for PMI indices have come down more recently. Furthermore, interest rates have been hiked in 2021, and unemployment has been climbing up. Brazil’s hope for an economic recovery is certainly related to visible progress in the fight against corona – but in the short run possibly even more to a global economic recovery and to better conditions for Brazilians exports already in the forthcoming quarters.

In the meanwhile, we also should hope for relief in the terrible Indian pandemic!

 

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

 

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Help to India – much more is needed!

27 April, 2021

Just after having concluded my recent article about India’s covid-19 (B1.617) crisis, the first countries announced that they would send oxygen and other desperately needed equipment to India as soon as possible – among them the United States, the UK, Germany, France and even Pakistan.

Concerning Sweden, I read two days ago a message from the government agency MSB (Swedish Civil Contingencies Agency) that the volume of Swedish help to India ultimately depends on the situation and how much support is given by other countries. In my view, this comment is a terrifying mix of ignorance and/or cynicism. In the meanwhile, 120 respirators were promised to India which, however, does not look very generous. More should be donated by Sweden. What about oxygen generators and other stuff?

Unfortunately, too many decisions-makers outside India still do not understand the gigantic dimensions of India. Sure, each aircraft landing in India with badly needed equipment is a good deed. A good deed is also that the EU commences now putting together a common strategy and common action. Hopefully, much more is to come.

Summary – understand the size of India!

I am still missing more convincing and wholehearted efforts from the international arena. Sure, we have to welcome that the Indian tragedy has been recognized more globally. However, the following three important matters of fact should be paid attention to more clearly:

¤  India is an incredible giant country with enormous further domestic contagion risks;

¤  enormous domestic contagion risks also mean enormous global contagion risks;

¤  reflecting on the two risks mentioned above means obviously – together with the current dramatic situation – that India needs much more equipment from abroad for fighting against B 1.617 than currently on the cards. Right away!

 

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

 

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