Economic globalization

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Economic globalization is one of the three main dimensions of globalization commonly found in academic literature, with the two others being political globalization and cultural globalization, as well as the general term of globalization.^[1] Economic globalization refers to the widespread international movement of goods, capital, services, technology and information. It is the increasing economic integration and interdependence of national, regional, and local economies across the world through an intensification of cross-border movement of goods, services, technologies and capital.^[2] Economic globalization primarily comprises the globalization of production, finance, markets, technology, organizational regimes, institutions, corporations, and people.^[3]

While economic globalization has been expanding since the emergence of trans-national trade, it has grown at an increased rate due to improvements in the efficiency of long-distance transportation, advances in telecommunication, the importance of information rather than physical capital in the modern economy, and by developments in science and technology.^[4] The rate of globalization has also increased under the framework of the General Agreement on Tariffs and Trade and the World Trade Organization, in which countries gradually cut down trade barriers and opened up their current accounts and capital accounts.^[4] This recent boom has been largely supported by developed economies integrating with developing countries through foreign direct investment, lowering costs of doing business, the reduction of trade barriers, and in many cases cross-border migration.

Global Economic Situation^[5]: Global growth decelerated due to weak performance in advanced economies and tight monetary policy stance at the global level to address the problem of inflation.

The Russia-Ukraine conflict adversely affected the global economy, leading growth to decelerate and high inflation. The pass-through of increased international commodity prices is reflected in currency depreciation and elevated cost of production.

After realising 3.4% global growth in 2022, the growth is projected to slowdown to 2.8% in 2023 before rising to 3.0% in 2024.

Global inflation, which increased from 4.7% in 2021 to 8.7% in 2022, is expected to decline to 7.0% in 2023 on account of lower commodity prices.

The world trade volume increased by 2.7% during 2022, but it was lower than October’s 2022 projection of 3.5%. In the fourth quarter of 2022, the world trade volume declined heavily and pulled down the growth for the whole year.

The World Trade Volume Increased by 2.7% during 2022 and estimated to grow at 1.7% in 2023 Global Inflation 8.7%(2022) 7.0%(2023).

The projected Global Growth decelerated to 2.8% in 2023

and 3.0% in 2024. The world trade volume is estimated to grow 1.7% in 2023 before picking up to 3.2% in 2024.

Tightening global financial conditions could impact credit conditions, public finances which lead to capital outflows, debt burden, reduced savings and investment in emerging and developing economies.