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Study says Caribbean exports decreased in the first half of 2015Wednesday, October 21, 2015 > 10:26:55
A new Inter-American Development Bank (IDB) says exports of Latin American and Caribbean goods fell 10.9 per cent in the first half of 2015 compared to the same period in 2014.
The study, Trade and Integration Monitor 2015, notes it is the “steepest drop” since the 2009 trade collapse.
The IDB’s says that the contraction in exports, which had begun in mid-2014, has worsened this year as a result of a substantial decline in China’s demand and steep reductions averaging 37.1 per cent in the prices of commodities between June 2014 and June 2015.
The drop in the region’s exports also reflects the overall contraction in global trade, according to the study, presented here at a seminar organized by the IDB and INCAE Business School.
“The favorable conditions that fueled the region’s exports over the last decade have waned, and so it is crucial to diversify our exports through the implementation of trade promotion policies as well as policies to make use of trade agreements and enhance productivity,” said Paolo Giordano, Principal Economist of the IDB’s Integration and Trade Sector, and coordinator of the report.
Giordano said that, in 2014, the region’s exports had dropped by 2.8 per cent, adding that, in the first half of 2015,” numbers deteriorated further.”
The IDB said the South American countries were the most affected (-17.7 per cent) due to a fall in the price of raw materials and a shrinking regional manufacturing market.
The Caribbean countries (-14.9 per cent) experienced this deterioration in a context of overall economic vulnerability, the IDB said.
In Mexico (-2.2 percent) and Central America (-3.4 percent), the IDB said there was a negative trend shift vis-à-vis the previous year in spite of a greater diversification of exports.
Exports of services also were affected, as they grew by only 1.8 percent, compared to 4.7 percent the previous year, the IDB said.
The report analyzes the region’s overall economic situation, characterized by greater exchange rate volatility and prospects of higher international financing costs, and underlines the urgent need to implement public policies aimed at promoting trade diversification.
The report compiles the most recent statistics, analyzes the trade performance of the region, and includes a chapter on the evolution of export diversification over the last decade.
The analysis is based on the indicators provided by INTrade, the IDB’s trade and integration database.
According to the Monitor, the slowdown in the growth of the developing countries, both intra- and extra regional, has not yet been offset by the emerging momentum of the United States economy and the troubled recovery of the European countries.
Furthermore, the report states sustained appreciation of the US dollar and the low demand worldwide account for the reduction in primary commodity prices affecting regional exporters.