Trade Still Weak but Not Worse in December

February 11, 2009

Trade Still Weak but Not Worse in December

More than 60 countries have now reported trade data for November and they are uniformly weak, with imports on average down 14 percent and exports down 17 percent, as compared with the same month last year. In addition, 22 countries have now reported December data. While trade continues to be weak, there is little change since November, and nearly half of the countries show some improvement. So, while conditions did not improve in December they did not worsen significantly either.

Another indicator that the trade situation did not deteriorate further in December comes from the Baltic Dry Index. (The BDI is issued daily by the Baltic Exchange, which canvasses brokers around the world about the cost of shipping cargo of raw materials on various routes.) After a 93 percent drop since the early summer, November is the month when the Baltic Dry Index (BDI) appears to have bottomed out, suggesting that demand for shipping was at a low in that month.

While this is not exactly positive news, it could have been a lot worse.
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Posted by Caroline Freund on February 11, 2009 in Trade and trade finance | Permalink
The Man with the Two Trillion Dollar Plan

On Monday, World Bank Chief Economist Justin Lin proposed the establishment of a $2 trillion Global Recovery Plan. A new Marshall Plan, of sorts. You can listen to his presentation and read about it here.

The issue is that the United States of today is in a different position than the United States after the Second World War. It is hard to imagine Congress giving much money for causes abroad when the domestic economy is hurting. The same applies to the other rich economies. If anything, one may expect some lean years in development aid.

Posted by Simeon Djankov on February 11, 2009 in Aid in the crisis, International organizations | Permalink