According to the latest data from IfW Kiel Institute’s Kiel Trade Indicator, global trade was down by 1.3% in December compared to November. The decline stemmed from the ongoing unrest in the Red Sea, since the volume of shipments fell sharply for security reasons.
Spot freight rates started 2024 skyrocketing amid the logistical turmoil. As a result, Asia to Europe routes have seen significantly lower activity in trade. The Institute’s data showed that global trade and trade between the major economies have continued to weaken, as the bottleneck in the Red Sea continued to deepen.
The indicator also showed that export and import figures of the EU declined by 2% and 3.1%, respectively. The USA’s exports in December were down by 1.5%, and its imports were up by 1%.
Meanwhile, both exports and imports of China were pointing upwards with increases of 1.3% and 3.1%, respectively. The Institute opined that this increase can be attributed to an annual peak before the Chinese New Year.
“The detour of ships due to the attacks in the Red Sea around the Cape of Good Hope in Africa means that the time it takes to transport goods between Asian production centers and European consumers is significantly extended by up to 20 days,” said Julian Hinz, new head of the Kiel Trade Indicator.
