M Global FoundationGlobal Economics | North AmericaGlobal Trade Monitor: Staying SubduedMorgan Stanley & Co. LLCSeth B CarpenterChief Global Economist Seth.Carpenter@morganstanley.com +1 212 761-0370 Morgan Stanley MUFG Securities Co., Ltd.Chiwoong LeeEconomist Chiwoong.Lee@morganstanleymufg.com +81 3 6836-8920 Morgan Stanley & Co International plc (DIFC Branch)Rajeev SibalSenior Global Economist Rajeev.Sibal@morganstanley.com +971 4 709-7201 Morgan Stanley & Co. LLCCristina ArbelaezGlobal Economist Cristina.Arbelaez@morganstanley.com +1 212 761-2045 Arunima SinhaGlobal Economist Arunima.Sinha@morganstanley.com +1 212 761-4125 Morgan Stanley India Company Private LimitedMayank PhadkeEconomist Mayank.Phadke@morganstanley.com +91 22 6514-3452 Recent Global Macro Research Global Economic Briefing: The Global 360 (18 Jan 2024) US Public Policy Brief: What If? Fed Independence & the US Election (6 Feb 2024) Friday Finish – US Economics: Temperature Check (2 Feb 2024) Asia Economics: The Viewpoint: How Big of a Deflationary Force Will China Be? (29 Jan 2024) European Economics Weekly: What to Make of January Inflation? (2 Feb 2024) Japan Economics: BoJ Roadmap: 7 FAQs About Our BoJ Outlook (29 Jan 2024) China Trendspotting: Hesitating to Reflate (1 Feb 2024) China Economics: 1Q GDP Tracking at 4% Amid Weak PMI (31 Jan 2024) South Korea: Two tailwinds for trade (1 Feb 2024) Asia Economics: PMI Update: Closing the Divergence (1 Feb 2024) CEEMEA Economics Weekly: Elements of Surprise (2 Feb 2024) Week Ahead in Latin America: A Focus on Congress, Banxico, and CPIs (2 Feb 2024) Recent Morgan Stanley publications related to Deflation in Chinese export prices continues to drive a decline in value of global trade, while trade volumes remain flat. Red Sea disruptions are likely to have limited macroeconomic effects as long as they remain transitory. • We expect moderation in global growth to around 3%Y for 2023 and 2024, after recording 3.5%Y in 2022.• In Nov-23, the latest data available, global goods exports were flat YoY in value terms, but the strong deflation in global export prices has meant contraction in volume terms. Global services growth remained resilient. • Global export prices remain deflationary at -2.7%Y in November, and have averaged -4.4%Y over the course of 2023. Chinese export prices remain deeply deflationary at -9.8%Y. • We do not expect ongoing disruptions in the Red Sea will have a material macroeconomic impact as long as they remain transitory in nature. Europe is more exposed than the US, but it will take persistent supply chain disruptions and increased delivery times to affect our outlooks for inflation and growth. • We take a closer look at the differences in the published statistics on US and China trade data: the US Census data records a much smaller increase in Chinese imports to the US than the Customs data of the China...
