Malta’s trade is forecast to grow 83.80 per cent by 2026 at an annualised rate of 0.69 per cent to 2016, increasing substantially between 2017 and 2021 at 5.65 per cent, according to the latest HSBC Global Connections Trade Forecast.
Malta is exposed to the present fluctuations in world trade that result from the general economic climate firstly because of its role as a hub between major trading routes, and secondly as all its businesses are exposed to international markets in some way.
Annualised total trade growth in Malta over the next 15 years will be 3.31 per cent, which is the rate at which companies will need to increase their international activities if they are to keep pace with this change.
International trade growth will accelerate from 2014 as the global economy ends a period of growth contraction, according to HSBC’s forecast. It finds international businesses will recover more rapidly and increase their trade activity earlier than previously expected. This results in predicted trade growth of 86 per cent to 2026, taking total trade activity in 2026 to $53.8 trillion (€40tn) compared to a predicted $28.9 trillion (€21.5tn) for 2012.
The acceleration in trade growth is driven by two key trends: ‘trade fuelling trade’ and ‘corridor creators’.
The report predicts the rapid growth of sectors that support world trade. Eight of the top 10 emerging fast growth sectors fall into this category, including containers and packaging, reflecting a greater transportation of goods around the world.
Corridor creators are businesses searching out the best trade partners to drive competitive advantage, regardless of location, defining their own trade routes and corridors.
For example, Indian businesses are opening up trade in pharmaceuticals with emerging African and Asian countries, creating new corridors in the Southern Silk route.
These innovative businesses are the ones to watch as they help to redefine how individual nations and regions are defined. This is evidenced by the growing trade relationship between Germany and Latin America in the automotive sector.
Germany is using existing relationships with Mexico to forge new links with Argentina.
“The international business world isn’t prepared to sit back and wait for the outcome of ongoing conversations about economic recovery,” HSBC Commercial Banking group managing director and global head Alan Keir said.
“Once businesses followed economic investment, forward-thinking companies are leading the way now. Whether taking advantage of shorter-term growth in international trade, which despite economic uncertainty sits at $1trillion (€0.74tn) a year, or by creating new supply chains that open up trade corridors, businesses are connecting themselves to future opportunities.”
HSBC’s Global Connections highlights how innovative business activity is reshaping the trading world. It identifies new and emerging trade hubs: countries that are developing or expanding their role as gateways in key trade corridors or between regions.
Turkey and Malta are already known as gateways between Europe and the Middle East, and the report shows that their trade activity continues to grow.
The report is available at www.hsbc.com/tradeconnections.