The rising cost of trade
Higher bond yields, inflation, and oil prices are raising the cost of trade.
Global trade is coming under pressure from higher bond yields, renewed inflation, and a sharp rise in oil prices.
The impacts of these developments on trade are three-fold:
- Higher inflation erodes purchasing power and higher rates can reduce spending.
- Higher bond yields make trade financing more costly.
- Higher oil prices raise the cost of moving goods.
Overall, global trade volumes are set to slow more than previously expected. In our latest baseline, we expect global goods export growth to reach a trough at 2.9% in Q1 2027, down from 3.6% in our previous baseline earlier this month (Chart 1). The weaker outlook extends through 2027, with export growth averaging 3% over the year, down from our prior forecast of 3.5%.
Firms will respond by adjusting orders and inventories, with different implications for freight demand across cargo types and shipping segments. We discuss each channel in this report.
Download the report for more detailed insights.
