The Organisation for Economic Cooperation and Development (OECD) said this week that exports from the G7 and Bric countries in the first three months of the year declined 2.7% compared to the final quarter of 2013. Imports remained relatively unchanged with growth of just 0.1%.
The OECD said the sharpest declines in exports were recorded from China, where exports fell 7.3% quarter on quarter. The Chinese lunar new year and Beijing's move to reduce over-invoicing by companies to get around capital controls primarily caused this fall, the OECD said.
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| HQ of OECD. Source: OECD/Michael Dean |
By comparison, Brazil’s exports fell by 5.8% while imports were up 1.9%. India also recorded declines across the board, with exports falling 3% and imports dropping by 0.9%. Russia, suffering the impact of US and European Union sanctions over the annexation of Crimea, also reported a 2.9% decline exports and similar fall in imports.
The G7 countries did not fair much better. UK exports and imports fell 4.3% and 3.2%, respectively, and exports and imports were mainly flat in France. Germany and Italy however, were the only countries in the group of seven to report quarter on quarter increases in exports of 2.1% and 1.5%.
Kwabena Ayirebi, global head of business management, global trade and receivables finance at HSBC, says that the flows of trade are likely to see some fluctuations: "While recognising the recent OECD figures show merchandise trade declined in the first quarter of 2014, it is important to remember that business trends are cyclical.”
Ayirebi adds that changing global demographics will ensure trade remains a key component in global economic growth: “We believe trade will continue to be a significant driver for growth, as the long-term fundamentals remain unchanged.
“The global population will continue to expand, with almost three billion people - more than 40% of today's population - predicted to join the middle classes by 2050, almost all of whom will come from the so-called emerging markets.”