JAMAICA OBSERVER- A new study conducted by the 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, noted that it is the “steepest drop” since the 2009 trade collapse.
The IDB’s said 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 in San José, Costa Rica at a seminar organised by the IDB and INCAE Business School.
“The favourable conditions that fuelled 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.
The report analyses the region’s overall economic situation, characterised 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, analyses 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.