G20 international trade growth slows in Q2’22

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Rising energy prices boosted North American merchandise trade in the second quarter, with exports rising 10.2% in the United States and 11% in Canada. In the EU, exports grew modestly (up 0.3%), while imports grew faster (up 3.0%), largely driven by energy.

Exports contracted in East Asia as lockdown measures continued to disrupt economic activity in the region and inflationary pressures weighed on foreign demand for goods. Exports fell 4.9% in Japan, 0.4% in China and 2.2% in Korea. High prices continued to boost the value of exports from major G20 commodity traders, with exports increasing in Australia (up 12.5%), Indonesia (up 12.7%) and India (in increase of 7.1%).

While high commodity prices, exacerbated by the war in Ukraine, fueled merchandise trade growth in nominal terms, the slowdown in value growth partly reflects the appreciation of the US dollar against other major currencies.

G20 services trade growth also slowed in the second quarter in current US dollars. Exports and imports are expected to increase by 1.1% and 2.2%, compared to the slightly higher rates recorded in the first quarter (2.1% and 2.3%, respectively).

Strong travel and transportation supported growth in many G20 economies, while prolonged COVID-19 lockdown measures weighed on services trade in East Asia. North American services trade rose sharply in the second quarter, largely on the back of a strong recovery in travel.

Conversely, trade in services slowed in Europe. Exports contracted 2.7% in Germany, reflecting a decline in intellectual, financial and business services, while imports rose 4.6%, boosted by travel. France recorded a modest increase in exports (+1.8%) thanks to transport and travel, while imports contracted by 1.2%. Across East Asia, trade in services presented a mixed picture, with growth in travel and transportation being partially offset by weakness in trade in other services. For the first time since the first quarter of 2020, China reported a decline in services exports and imports (down 8.1% and 3.3%, respectively).

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