Bridges Weekly Trade News Digest • Volume 13 • Number 4 • 4th February 2009
OECD Confirms Drop in Rich Country Trade Flows
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International trade flows declined over the last three months of 2008, a recent report has revealed, confirming fears that the ongoing economic turmoil has slowed the pace of global commerce.
Analysing statistics from the Group of Seven world economic powers, the Organisation for Economic Cooperation and Development found that merchandise export volumes fell 0.2 percent in the third quarter, while import volumes rose 0.4 percent.
The G7 includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
The report, released on 28 January, provides information on the three months from October to December 2008, the third quarter under the OECD system, and contrasts those numbers with trends from the previous year. The data is separated by merchandise trade for the G7 nations as well as trade in goods and services for both the G7 as well as the 23 other rich countries that are members of the OECD.
On a year-on-year basis, G7 merchandise import volumes fell 1.4 percent in the third quarter, while exports rose 1.9 percent, the report found. These figures mark the first decline and lowest growth, respectively, since the third quarter of 2006.
The report noted that within the United States, growth in merchandise exports continued to be the highest of the G7, with a yearly increase of 8.3 percent and positive growth in the third quarter of 2008. Compared to the same quarter in 2007, however, the report found that US import volumes had declined 3.6 percent.
Also notable was a growth in quarter merchandise import volume within Germany, where an increase of 3.4 percent marked the highest rate within the G7. But the nation saw exports decline by 2.9 percent in the third quarter of 2008, generally stagnating over the course of a year.
Looking at trade across the OECD’s 30 members, the report also analysed changes in trade in goods and services. The report indicated declines across the board, as the value of exports and imports of goods and services in the OECD area fell 1.6 percent and 0.2 percent respectively from the previous quarter. Additionally, growth in the value of exports and imports of goods and services slowed to 15.6 percent and 17 percent, respectively, on a year-on-year basis.
Gabriel Stein, chief international economist at London based Lombard Street Research, said that the report signifies that “the global economy is doing very badly.” He further added that the report is already “old news” in the rapidly changing financial market, and that the next report is likely to show worse numbers.
The report is available now at http://www.oecd.org/dataoecd/14/55/42058488.pdf.
ICTSD Reporting; “Trade Falls are ‘awful news’ for global economy,” FUND STRATEGY, 28 January 2008.
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