Last reviewed 17 September 2021
The Department for International Trade’s (DIT) new global trade outlook explores the long-term trends that it believes will shape the global economy and international trade in the coming decades.
In the 60-page report available here, it emphasises that these are not predictions of what will happen, nor what the Government would necessarily like to happen.
Rather, the projections are one possible future that could emerge based on an informed analysis and neutral extrapolation of the trends that can be observed today.
There are many economic, political, technological and environmental risks and uncertainties that could materialise over the coming decades that could cause global trade to diverge from the projections in the Outlook.
A key uncertainty in the near-term is how countries will recover from the coronavirus crisis.
“Since the Outlook is focused on the longer term,” the DIT explained, “we abstain from making judgements about the near term by tying our 2021-2026 projections to the International Monetary Fund’s [IMF] April 2021 World Economic Outlook forecasts.”
The report suggests that global GDP will continue to expand over the coming decades but at a slowing rate. Slower population growth and ageing workforces will hold growth back.
The UK was the sixth largest economy in the world in 2019 and is projected to remain broadly in that position to 2050. It should remain one of the top 10 trading nations in the world.
However, as living standards rise overseas — particularly in emerging markets — the UK’s share of global GDP is projected to fall from 3.3% in 2019 to around 2.7% by 2050.
“UK exporters are well-placed to capitalise on the growth of the global middle class as richer populations tend to buy more of the high-value goods and services that UK businesses specialise in”, the report argues.
Nevertheless, rapid trade growth in other regions means that, assuming past trends continue and without policy changes, the UK’s share of global exports is likely to fall from 3.6% in 2019 to around 2.6% by 2050.