BANGKOK, Thailand – Merchandise trade volume in the ASEAN region is expected to grow by over three percent this year, expanding at a slightly faster rate than overall Asia, according to an economist from the World Trade Organization (WTO).
During the Outreach for Southeast Asia and Pacific journalists organized by the WTO in Bangkok, Thailand, WTO chief economist Ralph Ossa said that merchandise trade volume growth rates in ASEAN countries tend to be close to, but slightly higher than Asia overall.
“Average annual growth of ASEAN exports since 2010 was 4.4 percent, slightly higher than the four percent growth in Asia,” Ossa said.
Similarly, Ossa pointed out that ASEAN’s average import growth of 4.7 percent over the same period was a percentage point higher than Asia’s.
“If this tendency holds up, we should expect export and import volume growth of over three percent in 2023,” he added.
For overall Asia, Ossa said merchandise trade growth is expected to be weak by historical standards this year after stagnating in 2022, but it should pick up substantially in 2024.
“The stagnation of 2022 was partly due to recurring outbreaks of COVID-19 in China that disrupted production and trade, but the relaxation of pandemic controls there should provide a boost to regional trade growth going forward,”Ossa said.
He said that merchandise export volume growth for Asia should pick up to 2.5 percent this year from 0.6 percent in 2022, and then accelerate to 4.7 percent in 2024.
“To put this in context, consider that the average rate of export growth in Asia since 2010 was four percent while the average rate between 1990 and 2008 was 9.1 percent,” Ossa said.
Ossa said exports this year would be weighed down by weak demand in other regions, particularly North America and Europe where imports are expected to stagnate or decline slightly (-0.1 percent and -0.6 percent respectively).
He said merchandise import volumes in Asia should grow by 2.6 percent this year, similar to export growth, but weaker than the projected 4.2 percent gross domestic product (GDP) growth rate for 2023.
The WTO economist, however, said Asian import volume growth of 5.2 percent should exceed the region’s expected GDP growth of 4.3 percent.
“In general, imports tend to fluctuate more strongly than GDP, in part due to the higher share of pro-cyclical spending on machinery and consumer durables in trade compared to GDP,” he said.
During the same presentation, Ossa also highlighted that intra-regional trade in ASEAN has been declining in recent years.
“Intra-ASEAN trade in 2022 was worth nearly $ 450 billion, up 64 percent compared to 2016 in nominal terms. Despite this rise, the share of intra-regional trade in the group’s exports dropped from 24 percent to 14 percent while the share of intra-imports fell from 25 percent to 15 percent over the same period,” Ossa said.