Trade in goods in the G-20 countries fell in the second quarter, negative data highlighting uncertainties surrounding the development of the global economy. According to the Organization for Economic Co-operation and Development (OECD), exports of goods fell by 3.1% and imports by 2% in US dollar terms compared to the first quarter, “reflecting the weakness in global demand and the fall in prices reflects”. Raw materials, particularly energy,” reads the agency’s statement.
The decline in the energy sector particularly affected transactions from the US, whose exports fell by 5.7% and imports by 2%. This does not mean that they have made fewer shipments abroad, but rather that the reduction in the price of gas and crude oil, two of the products from which they earn most of their income, also reduces their income. In neighboring Canada, trade performance was slightly better but still negative: exports fell 3.7% and imports were flat.
This brings the stats to a new glass of cold water after G-20 export growth in the first quarter, which rose 2.2%, driven by China. In any case, the trend is not optimistic: trade in goods has declined in three of the last four quarters, and the first data from China released in July with sharp declines in exports and imports do not suggest that the situation will worsen or improve in the short term .
In the case of the European Union, foreign sales of goods fell in Germany and Italy, but rose in France thanks to the aviation sector. Across the association of municipalities, the fall in the price of energy, most of which is purchased abroad, led to a 1.2% drop in imports. The United Kingdom, on the other hand, was able to counter this with positive exports of goods, namely 2.1%, thanks to strong sales of machinery and transport equipment.
Among other things, the OECD highlights that exports from China, considered the factory of the world, fell by 5.7%, partly due to lower demand for electronic products. And Japan and South Korea saw their imports fall sharply (8.1% and 7.9% respectively) due to the drop in energy prices, lowering their bill. The opposite was the case for Australia and Indonesia, where their exports fell due to lower commodity prices.
The decline was more pronounced in trade in services. Exports rose from 4.5% in the first quarter to just two-tenths in the second quarter. At the same time, imports also collapsed from 8.8% to -0.6%. In the United States, lower spending on transport and travel was the reason for a 1.3% drop in services imports, for the same reasons as in France, where the drop was more pronounced (-7.2%).
On a positive note, UK services imports increased by 2.9%, driven by higher purchases related to business and financial intellectual property. Exports increased in Australia on growth in travel and passenger transport and in South Korea on information and communication services, travel and finance.
The World Trade Organization is forecasting global trade growth of just 1.7% this year, well below last year’s increase (2.7%) and the average for the past decade (2.6%).
Worst forecasts for the third quarter
In this sense, the World Trade Organization (WTO) assured this Thursday that world trade showed signs of recovery in the second quarter, but its estimates suggest that activity will weaken in the third quarter due to the fall in export orders.
Trade in goods rose in the second quarter after six months of decline but still remains below average, according to the World Barometer. “A sustained recovery in the third quarter and beyond is uncertain as barometer-based export orders remain weak,” the WTO said.
At the end of the first half of 2023, trade in goods by volume was 1% lower than a year earlier and 0.3% lower than in the first quarter, which for the WTO means that the slowdown that started in the fourth quarter of 2022 will be extended.
The main reasons for the start of this situation were high energy and food prices due to the war in Ukraine, as well as tighter monetary policies to curb inflation in advanced economies. Import demand remains low due to weak growth in the European economies and China, according to the WTO.
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