• Global trade uncertainty is rising sharply due to trade tensions between the United States and China.
  • In a new index, IMF describes trade uncertainty as a driving factor for “sluggish global growth”.
  • Business Insider SSA looks at the levels of trade uncertainty in some sub-Saharan African economies for 2019.

A new report by the International Monetary Fund (IMF) has revealed that global trade uncertainty is rising sharply.

The report cited escalating trade tensions between the United States and China as the major cause.

In Africa, including the Middle East, Central Asia, trade uncertainty remain moderately low. 

According to the new index (World Trade Uncertainty index) released on Monday, September 9th, the Washington-based fund said described trade uncertainty as a driving factor for “sluggish global growth”.

The index tracks trade uncertainty across 143 countries. It is the first effort to create a trade uncertainty index for a large set of advanced and developing economies by Scott Baker, Nicholas Bloom, and Steven Davis.

Trade Uncertainty in the world
Trade Uncertainty in the world
IMF

The index shows increased uncertainty starting around the third quarter of 2018, coinciding with a heavily publicised series of tariff increases by the United States and China.

“It then declined in the fourth quarter of 2018 as the U.S and Chinese officials announced a deal to halt the escalation of tariffs at the G-20 meeting in December in Buenos Aires. It significantly spiked again in the first quarter of 2019 following a substantial expansion of American tariffs on imports from China on March 1,” the report states.

IMF estimates that the increase in trade uncertainty observed in the first quarter of 2019 could be enough to reduce global growth by up to 0.75 percentage point in 2019.

Here are the levels of trade uncertainty in some sub-Saharan African countries for 2019:

1. Algeria

  • Q1: 13
  • Q2: 17

2. South Africa

  • Q1: 18
  • Q2: 14
Where trade tensions are high
Where trade tensions are high
IMF

3. DRC

  • Q1: 16
  • Q2: 8

4. Nigeria

  • Q1: 5
  • Q2: 7

5. Benin

  • Q1: 2
  • Q2: 5

6. Zimbabwe

  • Q1: 7
  • Q2: 4

7. Angola

  • Q1: 4
  • Q2: 3

7. Ethiopia

  • Q1: 7
  • Q2: 3