Report: U.S., China trade conflict to effect global retail sales
The escalating trade conflict between the United States and China will have a dampening effect on retail sales around the globe.
Global retail volume growth will be 2.8% in 2019, down from 2.9% predicted six months ago, as a result of the US-China trade conflict, according to a report from The Economist Intelligence Unit (The EIU), which provides forecasting and advisory services. The EIU lowered its forecast for retail sales growth in the United States from 2.5% to 2.4%, while its forecast for China has fallen from 6.7% to 6.1%. Even so, China’s retail sales will account for 20% of the global total in 2019, almost level with the United States.
With the United States poised to impose more tariffs on its remaining imports from China, there is a risk that this will escalate into a full-blown global trade war, which would disrupt supply chains in the retail and consumer goods industries, the report warned. It could also undermine business and consumer confidence, dampening investment and private consumption. With the United States also due to raise interest rates further, emerging markets will be particularly vulnerable.
“Only India will really be able to take up any slack left by China’s slower than expected expansion,” said Shveta Sharma, consumer goods analyst at the EIU. “Its e-commerce sector will grow particularly fast, as will e-commerce worldwide.” Nevertheless, we still expect strong retail growth in most emerging markets, with a rebound in the transition countries and continued strong demand in Asia.
Download the full report at: eiu.com/industries-in-2019.
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