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World Trade in 2009 and 2010 Report submitted to the AIECE Autumn General Meeting

World Trade in 2009 and 2010 Report submitted to the AIECE Autumn General Meeting Brussels, 4th-5th November 2009 By Alain Henriot. Content. 1. Overview of the world economy and general assumptions 2. Imports and domestic demand 3. Exports and price competitiveness 4. Trade balances.

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World Trade in 2009 and 2010 Report submitted to the AIECE Autumn General Meeting

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  1. World Trade in 2009 and 2010 Report submitted to the AIECE Autumn General Meeting Brussels, 4th-5th November 2009 By Alain Henriot

  2. Content 1. Overview of the world economy and general assumptions 2. Imports and domestic demand 3. Exports and price competitiveness 4. Trade balances

  3. Financial and raw materials markets have given an early sign of the rebound

  4. Raw material and energy prices have already strongly recovered

  5. World economy fell into recession in 2008Q4 and 2009Q1 before registering a positive growth in 2009Q2, which should have been strengthened in 2009Q3

  6. World industrial production back to previous trend (but a huge gap in terms of level)

  7. * (Sept. est.) Most recent figures show a pick up in world trade during last summer

  8. However, the use of « soft » data (here world PMI export order books) can be a bit misleading in the current context regarding the measure of the intensity of the rebound

  9. The gap between the current level of world trade and the pre-crisis level remains huge…

  10. … the consequence of an historical drop in trade flows World trade: an historical perspective

  11. World trade forecast: a strong rebound followed by a moderate growth (+7.4% in 2010 after -13.5% in 2009)

  12. Turning points of world trade and industrial production business cycles are very similar Growth cycles of world imports and world industrial production

  13. 1. Overview of world economy and general assumptions 2. Imports and domestic demand 3. Exports and price competitiveness 4. Trade balances

  14. First signals of a recovery were observed in emerging countries but no decoupling Import levels in volume terms

  15. China played a leading role here, leading other Asian countries China: imports by main suppliers

  16. The situation in other emerging countries remain heterogeneous regarding imports dynamism Import levels in volume terms

  17. We expect only a moderate growth of developed countries imports in 2010. No further gains of terms of trade in 2010 (transfers in 2009 of about 1% of GDP), but no inflationary pressure. Import levels in volume terms

  18. 1. Overview of world economy and general assumptions 2. Imports and domestic demand 3. Exports and price competitiveness 4. Trade balances

  19. Weakness of the dollar might slow the recovery in the Euro area Price competitiveness: national export prices/competitors in a common currency

  20. Germany and Japan especially hit by the contraction of the sales of equipment goods Value of exports (7 months 2009/7 months 2008, percentage change)

  21. 1. Overview of world economy and general assumptions 2. Imports and domestic demand 3. Exports and price competitiveness 4. Trade balances

  22. Main trade imbalances have not been fully offset by the crisis Trade balance

  23. Some risks of the forecast Downside risks . Would Europe and the U.S. find enough support from their internal demand to keep the global recovery continuing? . Overheating in China might trigger a double dip late 2010 . Global imbalances raises a risk on the exchange rate system (crash of the dollar) . As a consequence of trade deficits and high unemployment, the U.S. and Europe can be attracted by protectionist measures

  24. Some risks of the forecast Upside risks . The catching up process (huge output gap) might imply a quicker and longer economic growth of activity and trade than expected . Emerging countries could take the lead of world trade growth to satisfy internal needs

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