Double-Dip: Latin America and the Caribbean Facing the Contraction of World Trade
This report analyzes the weak growth of the region's export volume of goods and services and the strong impact of the correction in commodity prices since the middle of 2014. The report emphasizes the consequences of the realignment of exchange rates for the value of trade flows and the price-competitiveness of the export supply of the region.
The Trade and Integration Monitor 2015 analyzes different aspects of the global trade downturn and its effects on the region. This is the most recent edition of the series of reports elaborated by the Integration and Trade Sector of the Inter-American Development Bank that study the evolution of Latin America and the Caribbean's insertion into the global trading system, making use of data available in INTrade, the IDB's information system on integration and trade.
In the first few months of 2015, the trend in global trade—which had already reversed since mid-2014—worsened, sharply affecting the trade performance of Latin American and Caribbean countries. The change in the pattern of global growth, notably the slowdown in China and developing countries, has cooled real demand for regional products. In addition, the rapid deterioration of commodity prices—mainly oil and gas and metals—has depressed the value of trade and caused a severe contraction in regional aggregate exports in the first half of 2015, after the decline suffered the previous year.
In most countries, imbalances in the current account of the balance of payments have been exacerbated, in an international environment characterized by increasing currency volatility and foreseeable stiffer conditions on access to international finance. In this context, the need to adopt policies to support the diversification of exports is heightened.
Note: IDB Monograph, no. 350