Business | Economy
High oil prices help global trade grow by 6% in '05
Global trade, fuelled by oil fortunes of Africa and the Middle East, helped grow by six per cent last year, according to the World Trade Organisation's (WTO) Annual Report released on Friday.
- By Saifur Rahman, Business News Editor
- Published: 00:00 December 18, 2006
Dubai: Global trade, fuelled by oil fortunes of Africa and the Middle East, helped grow by six per cent last year, according to the World Trade Organisation's (WTO) Annual Report released on Friday.
"Fuelled by the rise in oil prices, Africa, the Middle East, Central and South America and the Commonwealth of Independent States (CIS) recorded strong merchandise export growth in 2005. All these regions are large net exporters of fuels. Africa and the Middle East recorded their highest shares in world merchandise exports in two decades, due to developments in the oil market over the last two years," it said.
"World trade, as measured by merchandise exports, grew by six per cent in real terms during 2005 (at constant prices), after an exceptional nine per cent expansion recorded in 2004."
Trade growth in dollar value terms, which is affected by price changes, decelerated more strongly than real trade growth in 2005, as average dollar prices increased less rapidly (6.5 per cent in 2005).
The marked rise in prices for fuels and other mining products has boosted the trade surplus of the oil exporting countries (regions) and deepened the trade deficit in many oil importing countries, WTO said.
The United States, which was already running large deficits in its trade balance (goods) and current account (goods and services) in 2004, experienced a further widening of these deficits in 2005. The US deficit in goods and services trade corresponded to slightly less than 6per cent of US GDP. It was also about six per cent of world merchandise and commercial services exports.
First time
"The value of world merchandise exports rose by 13 per cent in 2005, compared to 21 per cent in 2004 and exceeded the $10 trillion mark for the first time," the report said.
"Commercial services exports are estimated to have increased by 11 per cent at current prices to $2.4 trillion in 2005."
Trade developments by sector showed a large variation, mostly due to relative price developments. Weak and stagnating prices for food, agricultural raw materials and manufactured goods contrasted with a further sharp rise in metals and fuels prices.
Consequently, the share of fuels and other mining products in world merchandise trade rose to 16 per cent, the highest level since 1985.
"Today the real dynamism in trade is to be found in the developing world, where Brazil, China, India, Malaysia, Mexico and Thailand all posted double digit growth in exports," WTO director-general Pascal Lamy said in a statement issued on Friday.
"Not only have these emerging markets flexed their growing muscles in the global market place, but Africa too has staked its claim to a bigger share of the pie by posting export growth in excess of 25 per cent in each of the past three years," he addded in his statement.
More from Economy
More from Business
Business Editor's choice
-
‘Wrong Way' Krugman
The source of our economic malfunction lies with government-mandated bank regulations
-
Greek exit could make Eurozone stronger
Departure will show limits of bailouts and allow remaining members to act much more like a unit
-
UAE upholds values of free trade
Recently released statistics confirm an established fact, namely that of the UAE embracing the free trade principle in general and imports in particular
