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Trade slows in major economies

Merchandise trade growth slowed across major economies in the second quarter of 2011, according to figures just released by the OECD. Total imports of G7 and BRICS countries grew by only 1.1% in the second quarter compared to 10.1% in the previous quarter. Total export growth slowed to 1.9%, compared to 7.7% in the previous quarter.

Sharp fall in merchandise trade in major economies

China’s imports grew by 0.7%, compared to 11.1% in the first quarter, the lowest rate since the first quarter of 2009, while exports picked up strongly by 10.0% (compared to 2.9% in the previous quarter), leading to a sharp increase in the trade surplus.

In the United States, import growth slowed to 3.0% (versus 11.1% in the previous quarter) and export growth dropped to 2.6% (versus 5.6% in the previous quarter).

Compared to the first quarter, both import and export growth rates slowed down in all G7 and BRICS countries, except in  Brazil, where imports increased strongly by 11.2% (versus 5.7% in the previous quarter) and in China.

This slowdown in trade is moving in parallel with a slowdown in economic growth. There is now an increased worry concerning the possibility of countries slipping back into recession. We are likely to see calls for moderation in austerity programmes and a return to quantitative easing.

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Posted in International Trade, OECD

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