Mar 22, 1985

NINE PERCENT VOLUME GROWTH IN 1984.

GENEVA, MARCH 20 (IFDA/CHAKRAVARTHI RAGHAVAN)— World trade grew by nine percent in volume and 6-1/2 percent in dollar value in 1984, according to preliminary estimates of world trade by the GATT secretariat.

The increase in volume of world trade, nearly double the growth of world production, was the largest gain in eight years and brought the volume of world trade to an all-time high, GATT reports.

World trade had registered growth in 1981, fell back two percent in 1982, and recovered to grow by two percent in 1983.

The smaller increase in dollar value terms, is attributed by GATT to the appreciation of the dollar and the consequent fall in dollar unit values of exports by 2-1/2 percent.

At 1.955 billion dollars, world exports were close to the 1980 peak.

Third World countries increased their total export earnings by 7-1/2 percent in 1984, with all exports except fuels up 15 percent.

This compares with a 6-1/2 percent increase in earnings of industrial countries, and four percent of the eastern trading area (which includes socialist East Europeans and China).

A strong export growth, and stagnant imports resulted in reducing the trade deficit of Third World countries as a whole by an estimated 32 billion in 1984.

For the 16 heavily indebted countries (Argentina, Brazil, Chile, Colombia, Mexico, Peru, Venezuela, Egypt, Morocco, Nigeria, Indonesia, South Korea, Philippines, Thailand, Turkey and Yugoslavia), exports increased by 12 percent in value.

But their combined imports declined further in 1984, though at a much less rapid rate than in two preceding years.

Nine of them had a fall in import values of as much as 30 percent, while the remaining seven maintained or increased their 1983 import levels.

The aggregate trade surplus of these 16 may well be of the order of 35 to 40 billion dollars, twice that of 1983.

The merchandise trade deficit of the industrial countries increased by an estimated 33 billion in l984, while the trade surplus of the eastern trading area was unchanged.

World agricultural output recovered by 3-1/2 percent in 1984 - a four percent volume increase in industrial countries, a three percent in the Third World, and a small gain in the eastern trading area.

World agricultural trade is estimated to have grown at a slightly faster pace than output.

World mineral production and exports (including fuel) increased in volume terms by three and five percent respectively.

The volume of world manufacturing output increased by six percent in 1984, with a slightly faster volume of growth in the Third World and a somewhat slower one in the east.

Manufactured exports from the industrial world grew by 12 percent, and that of the Third World by 14 percent, and of the eastern trading area by four percent.

In dollar values, Japan was the world's largest exporter of manufactures, edging out to second place the Federal Republic of Germany, which had held this position since 1970.

Exports of electronic products expanded by nearly 25 percent, with shipments from the Third World rising by one-third.

Computers and related equipment as the most dynamic subgroup in this sector.

Automobile exports rose by ten percent.

Textiles and clothing exports of industrial countries rose by about five percent, while that from the Third World rose by over 20 percent.

Clothing exports of the Third World, which had stagnated in dollar value since 1980, rose by more than 25 percent in 1984, exceeding for the first time those of industrial countries.

World trade in iron and steel, which had declined for three consecutive years, is estimated to have increased in 1984 at a rate somewhat above the seven percent increase in world steel output.

In the Third World, there was a recovery of mining and a vigorous expansion of manufacturing.

In addition to increased exports to the industrial world, domestic spending also increased in some cases.

While a number of countries (in East Asia, west Asia and Caribbean) managed to keep inflation below five percent, in most of the highly indebted countries it accelerated.

In the Third World as a group, inflation approached a new post-war high of 50 percent in 1984, more than twice the annual average in the 1970’s.

The terms of trade of the Third World is estimated by GATT to have improved moderately in 1984.

For exporters of primary products the gains were weaker in the second half of 1984, while for others exporting manufactures it improved further.

Dollar export prices of primary commodities (excluding crude petroleum) remained unchanged in 1984.

Dollar export prices of crude petroleum dropped by about three percent, for the third consecutive year, while that of manufactures declined by about three percent, despite the slight increase of those originating in the U.S.

The dollar export prices of third world exports of food rose by 2-1/2 percent, those of agricultural raw materials by 5-1/2 percent, those of non-ferrous metals fell by 10-1/2 percent, with all primary products (excluding crude petroleum) registering a two percent increase.