Danish business leaders are concerned about the third consecutive quarter of decline in world trade, which fell by 1.4 percent in June, after hitting continuous lows since last fall.
New figures from CPB World Trade Monitor indicate that the economic slump is the biggest since the crisis of 2008, and is attributed to the US-China trade war and slow economic growth.
The gravity of the situation
“Three consecutive quarters of decline mean that world trade has shrunk over the past year,” explained Allan Sørensen, a senior analyst at the confederation of industry, Dansk Industri (DI).
“It’s very rare that we experience decreasing world trade for an entire year. In the past 25 years, this has only happened in the wake of the financial crisis and the tech bubble.”
Sørensen added that the economic uncertainty makes companies and consumers “reluctant to invest in machinery and large consumer goods, which are the goods that power world trade.”
Implications for Denmark
If the situation continues to persists, Danes may soon be subject to an unpleasant economic environment. Nicolai Wammen, Denmark’s finance minister indicated the possibility of a gloomy economic forecast.
“The global decline will also hurt Denmark. It’s important to be mindful of the risks,” Wammen told Bloomberg News.
In addition to the trade war, he blames Brexit and the shrinking German economy for the slump in Denmark. Production in Danish companies will also be hurt, predicts the finance minister.