International trade will make a positive contribution to the growth of the world economy in 2018, according to a new report.
Forecasts from National Australia Bank (NAB) economists have suggested that global GDP will expand by 3.6 per cent in 2018 and 3.8 per cent in 2019, up from 3.4 per cent in 2017 - suggesting that the global economy is starting to gather momentum after a difficult few years.
Recovering conditions in major economies such as the US, Europe and China are expected to be the main drivers of this growth, but the report also emphasized that international trade will once again become a positive contributor to economic growth, having acted as a drag for a number of years.
Strong consumption trends in major markets are helping to deliver improved export performances around the world, with China - one of the biggest players in world trade - currently showing signs suggesting an upbeat medium-term outlook, despite delivering relatively subdued results for October.
NAB's chief economist Alan Oster told Global Trade Review: "The old rule was that global GDP grows at 3.5 per cent, trade grows at seven per cent. That hasn't happened for a while; it still broadly isn't happening. If I look at Asia's trade hubs, Hong Kong and Singapore have growth rates of roughly 2.5 per cent.
"Where is the driver of Asian growth coming from? Big global economies. It's sort of not back to the traditional relationship, but as economies start to grow, that should encourage trade."
This comes after the World Trade Organization recently forecast that world merchandise trade volumes will grow by 3.6 per cent in 2017, representing a significant rise from the 2.4 per cent growth forecast made back in April. This reflects a better-than-expected performance during the first six months of the year.