Lower demand and lower commodity prices led to a contraction of trade in the world’s 20 most industrialized economies between April and June. Exports and imports of services also slowed.
Merchandise exports and imports of the world’s 20 most industrialized economies (G-20) contracted in the second quarter, according to data released Thursday by the Organization for Economic Co-operation and Development (OECD). This drop in trade reflects weaker demand and lower commodity prices.
OECD data reveals that G20 merchandise exports fell 3.1% between April and June, compared to the previous quarter, in nominal terms (which does not exclude the effects of inflation) and adjusted for seasonal and calendar effects. On the other hand, imports of G20 goods contracted less than exports by 2%.
The decline in raw material prices, especially energy, explains a large part of this trade contraction in the group of countries that includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, South Africa, Mexico, Russia and Saudi Arabia. South Africa, Turkey, the United Kingdom, the United States and the 27 member states of the European Union. Australia saw the largest quarterly decline in exports (-11.8%), followed by Indonesia (-9%) and India (-6.6%). It is followed by the United States and China, with both countries’ merchandise exports declining by 5.7% compared to the first quarter. China was hit by major penalties due to the decline in sales of electronic products.
On the other hand, imports of goods decreased by 2% in the US and 2.5% in China. The largest declines in imports occurred in Japan (-8.1%), South Korea (-7.9%) and Turkey (-6.2%).
In the European Union, exports of goods fell in Germany and Italy in the second quarter, but they grew “at a strong albeit slow pace” in France, “driven by transport equipment, especially aviation”. Imports from the European Union fell 1.2%, due to lower energy prices.
Exports and imports of services are also slowing
Preliminary data from the Organization for Economic Co-operation and Development also points to a sharp slowdown in services trade in the G20, where tourism holds a significant weight. Estimates show that exports slowed from 4.5% to 0.2% in the second quarter, while imports fell 0.6% between April and June, after growing 8.8% in the previous quarter.
The Organization for Economic Co-operation and Development still does not have data on the development of trade in services in the EU, but in the first quarter exports did show signs of slowing. In Germany – The largest European economy Services exports decreased on a quarterly basis by 1.7%, and in France it slowed to 0.6%. Services imports from Germany increased by 1% and decreased by 7.2% in France.
In the US, services exports grew by 1%, while imports decreased by 1.3%, mainly due to lower demand for transportation and travel. In China, there was a decline in both exports and imports: -4.4% and -1.4%, respectively.
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