An interview with Ashutosh Kumar, Global Head of Corporate Cash & Trade, Transaction Banking, Standard Chartered Bank
What role does trade play in the global economy?
During, and certainly since the financial crisis, economists and politicians alike have increasingly recognised that trade is instrumental in driving the global economy. Trade levels fell by 12.9% in 2009, immediately following the crisis, but in 2010, these figures bounced back with an increase of 14.5%, leading to an economic recovery in many regions. We saw varied growth levels across the regions; for example, in Asia, exports grew a great deal faster than in the west, and China in particular saw exports expand by 28%, double the global rate of growth.
The right trade finance solutions can be an essential catalyst for growth.
Over the past 20 years, average global growth rates have been around 6%, which we would expect to see this year, despite the serious economic challenges in Europe and the United States. Asia is again expected to contribute in a big way to this growth, and with intra-Asia trade now exceeding 50%, much of this growth is self-sustaining, without being significantly affected by the prospect of further economic instability in the west. New trade corridors are becoming more important too, such as between Asia and Latin America, and Asia and Africa.