Maersk forecasts long and deep contraction in international trade

September 18, 2023:According to the CEO of shipping titan Maersk forecasts long and deep contraction in international trade.

“Barring any negative surprises, we would hope for a slow pickup as we get into the coming year, a pickup that will not be a crack like what we have known in the past few years, but certainly, a demand that is a bit more in line with what we see in terms of consumption, and not so much an inventory correction,” Vincent Clerc told.

Clerc stated consumers in the U.S. and Europe have been key drivers in this demand uptick, and those markets have continued to “surprise on the upside.”

In 2022, the shipping firm warned of weak demand as warehouses filled with unwanted goods, with consumer confidence stuttering and supply chains congested.

The upcoming pickup would be fueled by consumption, he said, rather than the “inventory correction,” which has featured heavily during 2023.

Clerc said emerging markets are proving resilient despite the challenging economic climate, particularly in the cases of India, Latin America, and Africa.

North America is also vital for the next year despite faltering along with many other major economies due to macroeconomic factors, including Russia’s full-scale invasion of Ukraine and tensions with China.

“As this starts to normalize and works itself out, we will see a rebound in demand,” Clerc said.

“I would say emerging markets and North America are certainly the points where we see the most upside potential,” he added.

But the road to bolstering global trade and growth could be smoother, as IMF Managing Director Kristalina Georgieva highlighted in a recent interview with CNBC.

“What we see today is very troubling,” Georgieva told on the sidelines of the Group of 20 nations leaders’ summit in New Delhi.

“There is fragmentation in our world. Global trade grows slower than the global economy for the first time, with 2% trade and 3% global growth. Suppose we want trade to become, again, an engine of growth. In that case, we must create corridors and opportunities,” she said, referencing a planned rail-to-sea economic corridor linking India with Middle Eastern and European countries.