World trade in March is expected to decline by nearly 3 per cent as a result of the war in Ukraine.
According to the Kiel Institute for the World Economy, the negative consequences originating from the Russian invasion are affecting economies worldwide as the Kiel Trade Indicator’s latest figures show an abrupt downturn.
After more than a month of war, Russia’s increasing isolation has led to the suspension of container ships arriving and departing from its ports.
The Kiel Trade Indicator shows a staggering decline in trade for Russia, with exports shrinking by 5 per cent and imports by nearly 10 per cent.
“The sanctions imposed by the West are clearly having an effect, and the Russian population is facing an increasingly scarce supply of goods from abroad,” said Vincent Stamer, Head of Kiel Trade Indicator.
“Europe’s companies and shipping lines are obviously restricting transport by sea. The same is likely true for trade via the more important road transport, which explains the sharp decline in Russia’s imports.”
At Russia’s three largest ports — St. Petersburg, Vladivostok, and Novorossiysk — container freight traffic has slumped by half.
Ukraine has suffered the worst and has been cut off from international maritime trade.
Since the outbreak of war on 24 February, large container ships’ calls at the Port of Odessa have completely stopped.
Figures from the Kiel Trade Indicator for March report negative trends for almost all world economies.
Data for China show signals of stagnation, with imports up by 0.9 per cent and exports down by 0.9 per cent.
“The lockdown of the Shanghai metropolitan region, where mainly electronic goods are produced for export, is not yet clearly reflected in the trade figures for March. Probably also because the port there continues to operate,” Stamer added.
“Future disruptions in China’s trade are by no means off the table, however, partly because the Omicron variant of the COVID-19 virus is still rampant.”
Declines in exports (-5.6 per cent) and imports (-3.4 per cent) have been projected for the EU economy as well, whilst in the US exports are expected to fall more sharply by 3.4 per cent than imports by 0.6 per cent.