Interviews
2nd consecutive year of slowdown expected in world trade
18 Apr '08
3 min read
The preliminary figure of 5.5% trade growth for 2007 is slightly lower than the 6% forecast for 2007 this time last year. The global economy and world trade started to slow down in 2007 due to the deceleration of demand in the developed regions. North America showed the weakest growth in output, measured as gross domestic product (GDP).
Developing economies and the Commonwealth of Independent States (CIS) region 1, however, maintained or strengthened their expansion of output, contributing more than 40% of world output growth in 2007. Developing countries' share of world merchandise trade (exports plus imports) reached a new record level of 34% in 2007.
These two groups of countries are expected to record faster growth in imports than exports; together they are expected to contribute more than one half of global import growth in 2008.
The sharp rise of commodity prices - particularly fuels and metals - greatly improved the financial situation of most developing regions and boosted imports. But, higher energy and food prices translated into inflationary pressures worldwide.
Significant variations occurred among major currencies, but not all exchange rate movements were helpful to redress global imbalances. While European currencies appreciated vis-à-vis the US dollar, changes in the currencies of Asian economies with large current account surpluses had a mixed impact.
The decline of the US dollar in relation to the euro and other European currencies inflated the dollar values of international trade transactions. The dollar value of world merchandise exports rose by 15% to $13.6 trillion and that of commercial services by 18% to $3.3 trillion in 2007.
In real terms - with adjustment for price and exchange rate changes - real merchandise exports were up by 5.5% in 2007 compared to 8.5% in 2006.
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Developing economies and the Commonwealth of Independent States (CIS) region 1, however, maintained or strengthened their expansion of output, contributing more than 40% of world output growth in 2007. Developing countries' share of world merchandise trade (exports plus imports) reached a new record level of 34% in 2007.
These two groups of countries are expected to record faster growth in imports than exports; together they are expected to contribute more than one half of global import growth in 2008.
The sharp rise of commodity prices - particularly fuels and metals - greatly improved the financial situation of most developing regions and boosted imports. But, higher energy and food prices translated into inflationary pressures worldwide.
Significant variations occurred among major currencies, but not all exchange rate movements were helpful to redress global imbalances. While European currencies appreciated vis-à-vis the US dollar, changes in the currencies of Asian economies with large current account surpluses had a mixed impact.
The decline of the US dollar in relation to the euro and other European currencies inflated the dollar values of international trade transactions. The dollar value of world merchandise exports rose by 15% to $13.6 trillion and that of commercial services by 18% to $3.3 trillion in 2007.
In real terms - with adjustment for price and exchange rate changes - real merchandise exports were up by 5.5% in 2007 compared to 8.5% in 2006.
Click here to view more:
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