world trade in 2009 and 2010 report submitted to the aiece autumn general meeting
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World Trade in 2009 and 2010
Report submitted to the AIECE Autumn General Meeting
Brussels, 4th-5th November 2009
By Alain Henriot
- 2
1. Overview of the world economy and general assumptions
2. Imports and domestic demand
3. Exports and price competitiveness
4. Trade balances
• Content
- 3
• Financial and raw materials markets have given an early sign of the rebound
Domestic Market Capitalization (USD billions)
2002 2003 2004 2005 2006 2007 2008 200920000
30000
40000
50000
60000
- 4
• Raw material and energy prices have already strongly recovered
BrentU.S. dollars barrel
2002 2003 2004 2005 2006 2007 2008 200918
140
80
60
40
30
100
Industrial raw materials pricesJanuary 1988=100 (in dollar terms)
2002 2003 2004 2005 2006 2007 2008 200960
100
140
180
220
80
120
- 5
• World economy fell into recession in 2008Q4 and 2009Q1 before registering a positive growth in 2009Q2, which should have been strengthened in 2009Q3
© Coe-Rexecode
%
2002 2003 2004 2005 2006 2007 2008 2009 2010
0
-8
-6
-4
-2
0
2
4
6
8
y-o-y, %quarter-on-quarter, %
- 6
• World industrial production back to previous trend (but a huge gap in terms of level)
2005=100
2002 2003 2004 2005 2006 2007 2008 200985
90
95
100
105
110
115
- 7
• Most recent figures show a pick up in world trade during last summer
y-o-y, %
J F M A M J J A S O N D J F M A M J J A S O2008 2009
0
-20
-15
-10
-5
0
5
10
CPBCoe-Rexecode
2005=100
J F M A M J J A S O N D J F M A M J J A S O2008 2009
90
100
110
120
130
CPBCoe-Rexecode
* (Sept. est.)
- 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
y-o-y, %
2002 2003 2004 2005 2006 2007 2008 2009 2010
0
-20
-10
0
10
20
20
33
45
58
70
World trade (volume - LHS)World export order books PMI (RHS)
- 9
• The gap between the current level of world trade and the pre-crisis level remains huge…
y-o-y, %
909192939495969798990001020304050607080910
0
-20
-10
0
10
20
CPBCoe-Rexecode
2005=100
909192939495969798990001020304050607080910
20
40
60
80
100
120
140
CPBCoe-rexecode
- 10
• … the consequence of an historical drop in trade flows
annual percentage change
1929 1939 1949 1959 1969 1979 1989 1999 2009
0
-30
-20
-10
0
10
20
30
40
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)
2005=100
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
00
20
40
60
80
100
120
140Table 1. - World trade: indicative quarterly profile
2005 = 100 YoY %
2008 120,0 2009 103,8 -13,5 2010 111,5 7,4 QoQ % 2008 Q1 122,9 2008 Q2 121,8 -0,9 2008 Q3 121,0 -0,6 2008 Q4 114,2 -5,6 2009 Q1 102,2 -10,5 2009 Q2 100,5 -1,7 2009 Q3 105,1 4,6 2009 Q4 107,4 2,2 2010 Q1 109,0 1,5 2010 Q2 110,7 1,5 2010 Q3 112,3 1,5 2010 Q4 114,0 1,5 MoM Juin 09 100,9 Juillet 09 104,7 3,8 Août 09 102,3 -2,3 Septembre 09 108,4 6,0
- 12
• Turning points of world trade and industrial production business cycles are very similar
Deviation to trend
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
0
-0.10
-0.08
-0.06
-0.04
-0.02
0
0.02
0.04
0.06
0.08
0.10
World importsWorld industrial production
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
2005=100
2007 2008 200980
90
100
110
120
130
140
150
WorldDeveloped economiesEmerging countries
Import levels in volume terms
- 15
• China played a leading role here, leading other Asian countries
China: imports by main suppliersBillions of US dollars (3 months mov. avg.)
95 96 97 98 99 00 01 02 03 04 05 06 07 08 090.5
150.0
100.0
50.0
10.0
5.0
1.0
TotalAsiaApecJapanE.U.AseanUSA
- 16
• The situation in other emerging countries remain heterogeneous regarding imports dynamism
2005=100
2002 2003 2004 2005 2006 2007 2008 2009
60
80
100
120
140
160
180
NPIAOPECCEEC
Import levels in volume terms2005=100
2002 2003 2004 2005 2006 2007 2008 2009
40
60
80
100
120
140
160
Latin AmericaEmerging Asia (excl. NPIA)Africa (excl. OPEC countries)Middle East (excl. OPEC countries)
- 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.
2005=100
2002 2003 2004 2005 2006 2007 2008 2009
60
80
100
120
USAJapanEuropean Union (7 countries)
Import levels in volume terms
2005=100
2002 2003 2004 2005 2006 2007 2008 2009
70
80
90
100
110
120
130
GermanyItalyUKFrance
- 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
2005=100
2002 2003 2004 2005 2006 2007 2008 2009
80
90
100
110
120
Euro areaJapanUSA
2005=100
2002 2003 2004 2005 2006 2007 2008 2009
40
60
80
100
120
140
160
ChinaSouth Korea
- 20
• Germany and Japan especially hit by the contraction of the sales of equipment goods
Total
Machinery and
equipment
Share of Mach. &
Equip. in total exports (%, 7 months 2009)
France -30,8 -32,7 38,4Germany -32,5 -35,5 47,3Japan -35,9 -40,3 63,4Italy -34,2 -35,8 37,5Korea -22,5 -19,5 55,4Spain -30,6 -34,2 36,0UK -34,0 -35,6 35,6USA -24,8 -26,1 42,8
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
-1000
-800
-600
-400
-200
0
200
400
Eu ro a re a G e rm a n y Ja p a n Ch in a US A
2008
2009
2010
B illions of US dollars
- 23
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
• Some risks of the forecast
- 24
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
• Some risks of the forecast
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