Despite war, pandemic, global trade growth likely to accelerate in 2024

Globalisation reached a record high in 2022 and stayed nearly as high in 2023, despite various global shocks over the past decade, such as the Covid-19 pandemic, wars in Ukraine and Gaza, and the USChina trade conflict, a report said on Wednesday.

The "New DHL Global Connectedness Report 2024" by DHL and New York University's Stern School of Business, released here, also said that the share of global output traded internationally was back to a record high level in 2022.

After a slowdown in 2023, trade growth is forecast to accelerate in 2024, it said. Trade growth played a crucial role in boosting connectedness.

 

The report tracks how flows of trade, capital, information, and people move around the world and measure the globalisation of 181 countries and territories.

The globalisation of information flows has notably surged over the past two decades, even though the latest data show a slowdown in their growth, partly due to less research collaboration between the US and China.

Corporate globalisation is rising, with companies expanding their international presence and earning more sales abroad, it said.

"The most recent findings of the 'DHL Global Connectedness Report' unequivocally dispel the notion of globalisation reversing course. Far from being a mere buzzword, globalisation is an influential force that has profoundly reshaped our world and has further great potential," said John Pearson, CEO DHL Express.

He further said that expanding markets and fostering opportunities empower individuals, businesses, and entire nations to flourish in unique ways.

The report affirms the considerable potential to continue growing global flows. The report ranked Singapore as among the top most globalised countries followed by the Netherlands.

According to it, 143 countries became more globally connected, while only 38 saw their levels of connectedness decline.

Further evidence shows that Europe is the world's most globally connected region, followed by North America and the Middle East & North Africa, it said 'The DHL Global Connectedness Report' also shows that US-China ties continue to diminish, with the shares of both countries' flows involving each other decreasing by about one-quarter since 2016.

However, both countries remain significantly connected, demonstrating larger flows than almost any other pair of countries while Russia and Europe have decoupled, resulting in Russia facing an unprecedented drop in connectedness, more than twice as much as any previous decline on record among the world's 20 largest economies, it stated.

Based on data analysis, the report demonstrated that there is no wider split of the world economy between rival geopolitical blocs, it said that predictions of a global shift from globalisation to regionalisation are not at least yet borne out in patterns of international flows.

In fact, most international flows are taking place over stable or even longer distances, with a declining share happening inside major geographic regions, the report said. In the realm of trade, only North America shows a clear shift to more regionalised trade patterns, as per the report.

"Deglobalisation is still only a risk, not a current reality," said Steven Altman, Senior Research Scholar and Director of the DHL Initiative on Globalisation at NYU Stern's Center for the Future of Management.

"Geopolitical threats and public policy shifts have led many to predict a fracturing of the world economy along geographic or geopolitical lines, or even a retreat from international to domestic business," he said.

But the latest data, according to him, still show that international flows are growing and very few countries are cutting ties with their traditional counterparts.

"It is important to recognise the resilience of global flows because a lopsided focus on the threats to globalisation could make deglobalisation a self-fulfilling prophecy," he added.