Trade is a key driver of economic growth and will be crucial to supporting the global economic recovery post-pandemic. But what factors drive goods export growth? And which markets’ exports will grow fastest? To answer these questions our data science team built two machine-learning models.

In the first, we analysed 32 indicators, including GDP, consumer-confidence indices and tariffs, to determine the key drivers of global export growth. We included data for 50 economies.

It found that medium-term goods export growth is best explained by shorter-term goods export growth, suggesting that economies with strong export growth now are already competitive, and that expanding exports can deliver long-lasting benefits.

For example, expanding exports in the short term can help improve the local producers’ competitiveness, enabling exporters to move up value chains or attract more foreign investment – all of which can further boost future exports. Similarly, raising GDP per head and the level of trade openness may also increase future export growth.

The model also highlighted the importance of imports in expanding exports and found that reducing tariffs and barriers to trade can help boost medium-term goods exports.

When production is fragmented across different markets, businesses – especially smaller firms – rely on imported inputs to manufacture their exports.

Services are important too. They comprise about a quarter of global export flows – nearly half if contributions to manufacturing, such as finance, R&D or design, are included.

Higher foreign direct investment can also boost exports from the host economy via the transfer of capital, technology and managerial expertise from multinational corporations to local affiliates.

We then used these important indicators of export growth as a starting point to forecast goods export growth out to 2026 for 27 key economies.

Vietnam leads our forecasts, with its exports set to grow by 13 per cent from 2021-26 on an average annual basis, just ahead of 12.9 per cent for Bangladesh, 10.1 per cent for Sri Lanka and 8.6 per cent for the Philippines.

These economies should benefit from advancing trade liberalisation in the Asia-Pacific and the ongoing reconfiguration of supply chains. Some of these low-cost markets are already rising as alternatives to mainland China for products such as consumer electronics or clothing.

That trend seems set to advance as mainland China continues to upgrade its own participation in value chains and increasingly looks to outsource manufacturing elsewhere in the region. The pandemic may also cause some economies to reduce their trade reliance on mainland China.

For mainland China, our forecast of 5.9 per cent goods export growth over 2021-26 compares with double-digit rates from the 1980s to the early 2010s and reflects its evolving role in global trade, although it remains a major trader.

Elsewhere, we forecast 7.9 per cent for India, 6.7 per cent for the US, 6.2 per cent for Germany, 6.0 per cent for France and Spain, with 5.3 per cent for the UK and 3.6 per cent for Japan. We expect Mexico to average 8.4 per cent as some US businesses look to diversify suppliers or nearshore their sourcing and manufacturing because of the pandemic and US-China trade tensions.


First published 23rd September 2021.

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