Caribbean region’s exports grow more than world trade despite slowdown

WASHINGTON (CMC) – The value of goods exports from Latin America and the Caribbean continued to grow in the first half of 2022, and although at a slower pace than in the same period of the previous year, it has surpassed world trade.

According to a new report from the Inter-American Development Bank (IDB), after increasing by 27.9% in 2021, the region’s export value increased by 20.6% in the first half of 2022. This growth rate exceeded that of world trade. , which fell from 25.8% to 17.5% over the same period.

Exports slowed in response to a series of global shocks: the conflict in Ukraine, China’s zero COVID policy and tighter monetary policies.

According to the latest issue of the Trade and Integration Monitor, which analyzes the evolution of trade flows in Latin America and the Caribbean, projections for the rest of the year confirm a change in the trend of the region’s exports, which are moving towards a distinct slow down.

On the other hand, services exports, which had increased by 26.8% in 2021, continued to grow steadily in the first quarter of 2022. They grew at an exceptionally high rate (53.6%), exceeding the world average, driven by by the resumption of international travel and transport.

“Although trade in Latin America and the Caribbean grew more than the world average, prices explained most of the growth in export values. The slowing trend has now consolidated,” said Paolo Giordano, Senior Economist in the IDB’s Integration and Trade Sector, which coordinated the report.

Rising export prices accounted for nearly 70% of the year-over-year increase in the value of external sales from Latin America and the Caribbean in the first half of 2022. The report highlights the dynamics of the prices of the main export goods of the region: for example, the price of oil rose by 69.1%, that of coffee by 60.6% and that of sugar by 14.4%.

Export volumes were less dynamic than prices: growth slowed somewhat in the first half of 2022, but volumes increased by 5.3%. This growth was slightly above the global average (4.5 percent), although performance varied significantly by sub-region.

Imports slowed from 36.8% to 29.4%, but continued to grow more than exports, driven mainly by energy prices. As a result, the region’s terms of trade and trade balances have deteriorated.

The report highlights that although sales to the United States contributed the most to the recovery of trade in Latin America and the Caribbean, trade within the region was more dynamic than with the rest of the world (33.5 % versus 18.5%, respectively). As a result, the share of intraregional trade increased by 1.4 percentage points compared to 2021, accounting for 15.8% of the total in the first half of 2022.

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