T he International Momentary Fund, IMF have reported that the level of trade uncertainty in Nigeria stands at 6.24 per cent in the second quarter of 2019 This figure increased from 0.0 per cent in the third and fourth quarters of 2018 to 11.25 per cent in the first quarter of 2019.
The rising trade uncertainty index for Nigeria is attributable to cause of the slow growth of the economy and could continue to have negative impact of GPD growth.
Leading the world in trade uncertainty index is Canada with 33.99 percent in quarter one and rising to 32.3 in quarter two of 2019.
On the global level,” the trade policy uncertainty index is rising sharply, having been stable at low levels for about 20 years”, IMF stated. The world trade uncertainty in the past year jump 10 fold from previously recorded highs as the US – China trade war escalated, the US Based Fund further stated.
The report continued; “The index shows increased uncertainty starting around the third quarter of 2018, coinciding with a heavily publicized series of tariff increases by the United States and China. It then declined in the fourth quarter of 2018 as US 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 IMF said high levels of trade uncertainty had been recorded in key US trading partners such as Canada, Mexico, Japan, and large European economies, and in many other countries geographically close to the US and China
Still quoting the IMF report; “The level of trade uncertainty, however, varies significantly across regions and income groups. The recent rise in the uncertainty index has been felt the most in the Western Hemisphere, followed by Asia-Pacific and Europe”.
The IMF said high levels of trade uncertainty had been recorded in key US trading partners such as Canada, Mexico, Japan, and large European economies, and in many other countries geographically close to the US and China.
The cause of country trade uncertainty is ‘agitation’ within the economy and as it reflects in the reports by various groups and individual. IMF explained further;
” we tally the number of times “uncertainty” is mentioned in the reports in proximity to a word related to trade. Specifically, for each country and quarter, we search EIU reports for the words “uncertain,” “uncertainty,” and “uncertainties” appearing near the following words: protectionism, North American Free Trade Agreement, tariff, trade, United Nations Conference on Trade and Development, and World Trade Organization. To make the WTU index comparable across countries, we scale the raw counts by the total number of words in each report. An increase in the index indicates that trade uncertainty is rising, and vice versa”.