Rapid-growth markets: role in global trade

  • Share

RGMs will be an increasingly key destination for services exports including banking, insurance and other financial services. 

In 20 years, exports from RGMs will contribute almost 20% of world GDP, up from more than 10% now.

This will be especially the case for Asia, the Middle East and Africa. 

Trading places

RGMs will become more dependent on each other and less dependent on developed economies, helping them become less vulnerable to episodes of weak activity or financial market volatility in the advanced economies. 

The chart below compares exports from RGMs and advanced economies, and their contribution to world GDP.

Today, exports from RGMs exceed 10% of world GDP – more than twice their share a decade ago. In another 20 years, their share will approach 20% – double that of the advanced economies.

Exports as a % of global GDP

Source : Oxford Economics

Many governments in RGMs are negotiating away decades of trade barriers and market distortions in pursuit of larger markets, lower prices and entrepreneurial opportunity. They are putting in place the infrastructure to help goods cross borders from far-flung continents. 

The gradual easing of trade barriers should continue over the next 10 years, shaping trade patterns across the world. 

As RGMs grow richer, they take in more imports

Trade will be increasingly focused around Asia, the Middle East and Africa. Europe’s exports to Africa and the Middle East are expected to be around 50% larger than its exports to the US by 2020. 

Eurozone exports to RGMs were worth US$895b in 2011, up from US$230b in 2000 and in 20years, they will have overtaken intra-Eurozone trade, as the chart illustrates.

Exports from the Eurozone

Source : Oxford Economics

Sectors to keep an eye on

  • Machinery and transport equipment
  • Information and communications technology
  • Banking, insurance and financial services