Primary Country (Mandatory)

United States

Other Country (Optional)

Set News Language for United States

Primary Language (Mandatory)
English
Other Language[s] (Optional)
No other language available

Set News Language for World

Primary Language (Mandatory)
English
Other Language(s) (Optional)

Set News Source for United States

Primary Source (Mandatory)
CNN
Other Source[s] (Optional)

Set News Source for World

Primary Source (Mandatory)
AajTak
Other Source(s) (Optional)
  • Countries
    • India
    • United States
    • Qatar
    • Germany
    • China
    • Canada
    • World
  • Categories
    • National
    • International
    • Business
    • Entertainment
    • Sports
    • Special
    • All Categories
  • Available Languages for United States
    • English
  • All Languages
    • English
    • Hindi
    • Arabic
    • German
    • Chinese
    • French
  • Sources
    • India
      • AajTak
      • NDTV India
      • The Hindu
      • India Today
      • Zee News
      • NDTV
      • BBC
      • The Wire
      • News18
      • News 24
      • The Quint
      • ABP News
      • Zee News
      • News 24
    • United States
      • CNN
      • Fox News
      • Al Jazeera
      • CBSN
      • NY Post
      • Voice of America
      • The New York Times
      • HuffPost
      • ABC News
      • Newsy
    • Qatar
      • Al Jazeera
      • Al Arab
      • The Peninsula
      • Gulf Times
      • Al Sharq
      • Qatar Tribune
      • Al Raya
      • Lusail
    • Germany
      • DW
      • ZDF
      • ProSieben
      • RTL
      • n-tv
      • Die Welt
      • Süddeutsche Zeitung
      • Frankfurter Rundschau
    • China
      • China Daily
      • BBC
      • The New York Times
      • Voice of America
      • Beijing Daily
      • The Epoch Times
      • Ta Kung Pao
      • Xinmin Evening News
    • Canada
      • CBC
      • Radio-Canada
      • CTV
      • TVA Nouvelles
      • Le Journal de Montréal
      • Global News
      • BNN Bloomberg
      • Métro
Meaningful Beauty Lifting Eye Crème Buy Now
HeatGear Compression Long-Sleeve T-Shirt Buy Now
BALEAF Fleece-Lined Winter Leggings Buy Now
Walnut Book Page Holder Buy Now
Kenneth Cole Reaction Chelsea Tote Buy Now
Crystal Accented Bracelet Watch Buy Now
Outdoor Casual Vintage Long Sleeve Shirt Jacket Buy Now
2-Pack High-Waist Yoga Leggings Buy Now
Business Dress Shirts Wrinkle Free Buy Now
RUNBOX Slim RFID Leather Wallet Buy Now
Banarasi Art Silk Saree Buy Now
LUENX Men's Polarized Aviators Buy Now
Polarized Aviator Sunglasses Buy Now
VIZIO 32 inch D-Series Smart TV Buy Now
Saneen Digital 4k Cameras for Photography Buy Now
Dream Coat Anti-Humidity Spray Buy Now
Fire TV 50 inch 4K Smart TV with Alexa Buy Now
Trendy Women's Summer Tops Buy Now
3-Pack No-See-Thru Yoga Leggings Buy Now
Dead Sea Mud Mask for Face and Body Buy Now
MoreBack to News Headlines
Explained | What is affecting trade momentum?

Explained | What is affecting trade momentum?

The Hindu
Monday, June 5, 2023 5:34 PM GMT

Understanding the reasons why trade flow is at an all-time low

The story so far: Mired in a slowing economy, inflationary setting and tighter monetary controls worldover, India’s merchandise exports shrunk 12.7% on a year-on-year (YoY) basis to $34.66 billion in April — a six-month low. Imports fell sharper by 14% to $49.90 billion during the same period. As reported by The Hindu earlier, the fall in imports and exports is not limited to India as other countries too have recorded similar declines — affirming the notion about slowing global demand.

The essential headwinds observed with respect to global trade are weaker economic activities worldwide, inflation and tightening of monetary policies, disrupted supply chains because of the Russia-Ukraine conflict and financial instability because of the collapse of several financial institutions in advanced economies.

The ongoing conflict in Eastern Europe continues to have a bearing on the prices of energy, food and commodities. As observed by the World Trade Organization (WTO), though food and energy prices receded from their post conflict peaks by the fourth quarter last year, “they remained high by historical standards and continued to erode real incomes and import demand” during the mentioned period. The impact of energy prices was strongest during the winter months in Europe as Russia was among the largest suppliers of energy to Europe before it was sanctioned. Europe responded to the loss of gas shipments from Russia by shifting to other suppliers, including the U.S., Qatar, Norway and Algeria. This potentially increased LNG prices elsewhere such as Japan, where the prices doubled between January last year to February this year.

The collapse of financial institutions — such as of the crypto exchange FTX (November 2022) alongside three banks in the U.S. since March (the Silicon Valley Bank, Signature Bank and First Republic Bank), and the loss of confidence in Credit Suisse added to the troubled scenario. As the United Nations Conference on Trade and Development (UNCTAD) in its latest update (in April) concluded, the events raised “the spectre of financial contagion in an already slowing economy”.

The EU is India’s third largest trading partner after the U.S. and China. The European Economic Forecast (published in February) held that the region would “narrowly escape the recession” that took shape around September. Moreover, as per the latest published statistics for the Euro area, food, alcohol and tobacco experienced the highest annual rate of inflation (on a sequential basis) in May followed by non-energy industrial goods, services and energy.

As for the U.S., in May, Fed Chair Jerome Powell said that inflation had “somewhat” moderated since the middle of the last year. Nonetheless, inflation pressures continued to run high with expectations of it receding to 2% having a “long way to go”. The JP Morgan Global Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P, registered 49.6 in May — unchanged for the third consecutive month and indicating a marginal deterioration of business conditions. The indicator is used to assess manufacturing business conditions. It observed that, “while there was some brighter news on the production front, with output rising for a fourth month in a row, the production gains were again driven by improved supply (enabling the fulfilment of orders placed in prior months) rather than any new inflows of orders.”

To put it simply, in a period of economic slowdown, international trade, both exports and imports, falls sharply as overall demand for goods and services stand reduced. There is an aversion for discretionary spending which particularly weighs on some imports and postponable expenditures. It is in this light that the exports of engineering goods, gems and jewellery, chemicals, and readymade garments and plastics, along with petroleum products contracted or grew at a slower pace in 2023. Similarly, inflation, the uneven rise in prices especially of essentials such as food and energy erodes the purchasing power of an individual. However, it may happen that people in the country may turn to buying imports if they are cheaper than their indigenous products, but this is where the conversion rate may potentially have a bearing to offset the dynamics. Additionally, inflation also affects the flow of capital to a developing country. Important to note, the share of exports of goods and services combined in GDP stood at 21.4% in FY 2021-22.

Read full story on The Hindu
Share this story on:-
Run 3 Space | Play Space Running GamePlay Run 3, the ultimate space tunnel running game with 300+ challenging levels!Adv.
Traffic Jam 3D | Online Racing GameTraffic Jam 3D is a game where you’ll be driving through heavy traffic.Adv.
Duck Hunt | Play Old Classic GamePlay the classic 1984 light gun shooter game Duck Hunt on your browser.Adv.
More Related News
Markets climb in early trade on fresh foreign fund inflows, buying in Reliance

Sensex and Nifty surge on Reliance Industries boost, foreign fund inflows, and positive Asian market trends.

Yamaha celebrates dual milestone at Chennai factory, rolls out 5 millionth unit 

India Yamaha Motor celebrates 10 years in Chennai with 5 millionth two-wheeler, highlighting global operations and quality standards.

Trump-related crypto projects prompt user confusion, warnings from Trump’s son

Trump’s name is being used to promote several crypto projects that have nothing to do with his own ventures, prompting confusion.

Impact of Trump’s new tariffs on steel, aluminium on U.S. economy Premium

Trump threatens to increase steel tariffs to 50%, impacting U.S. economy, consumer demand, and domestic production negatively.

Classic Legends unveils Yezdi Adventure at ₹2.14 lakh

Classic Legends Pvt. Ltd. unveils the 2025 Yezdi Adventure motorcycle with classic-ADV styling and Indian road-ready performance.

Stainless steel industry seeks policy support to harness full potential 

India's stainless steel industry seeks a National Stainless Steel Policy to enhance manufacturing, innovation, and global competitiveness.

NCLAT suspends NCLT’s insolvency order against Reliance Infra

Reliance Infrastructure Ltd. (RInfra) successfully suspends insolvency proceedings after full payment to Dhursar Solar Power.

RBI's monetary policy panel starts deliberations; decision on June 6

RBI's MPC meeting to decide on rate cut amid economic growth concerns, with expectations of 25-50 bps reduction.

Rupee falls 29 paise to close at 85.90 against U.S. dollar

Rupee falls against dollar due to geopolitical tensions and oil prices, RBI expected to cut rates, equity market mixed.

Strong export orders drive May services PMI to three-month high of 58.8

India's services sector activity rises in May 2025, driven by strong exports, record employment, and price pressures.

India “vehemently opposed” ADB’s latest funding to Pakistan

Indian government vehemently opposes Asian Development Bank funding to Pakistan due to concerns over misuse and increased military spending.

Middle East crisis could pose an obstacle to India-Middle East-Europe corridor: MEA official

Ongoing Middle East crisis may hinder completion of India-Middle East-Europe Economic Corridor, facing competition and harmonization challenges.

Spot electricity prices declined substantially in May, amid reduced demand: Indian Energy Exchange

IEX reports significant drop in electricity prices in May 2025 due to lower demand and increased supply liquidity.

Parking Slot | Free Parking GamePlay Parking Slot, the best online 3D car driving and parking game.Adv.
Slope Ball Run - Play OnlineSlope Game takes you on an exciting journey of a ball on special paths.Adv.
RBI MPC decides to cut policy rate by 50 basis points to 5.5%, says RBI Governor

RBI cuts repo rate by 50 bps to 5.5%, Governor Sanjay Malhotra optimistic about Indian economy's growth and stability.

Rupee sees range-bound trading ahead of RBI Policy decision

Mumbai: Rupee weakens to 85.91 against US dollar before RBI policy announcement, dropping by 12 paise.

Markets decline in early trade ahead of RBI monetary policy outcome

Sensex and Nifty decline ahead of RBI policy outcome, global markets sluggish, FIIs offload equities, oil prices dip.

Walmart’s Flipkart secures approval for direct lending in India

A lending licence will enable Flipkart - India’s largest e-commerce firm - to lend directly, a more lucrative model for the group.

Does escalating spat with Trump pose regulatory threat for Musk businesses?

Regulators target Elon Musk's businesses amid political fallout with Trump, impacting Tesla, SpaceX, Neuralink, and more.

Is IBC an effective resolution tool? | Explained

India's Insolvency and Bankruptcy Code (IBC) has transformed the corporate insolvency resolution process, improving creditor recoveries and economic governance.

Technologies to shape airport experience, say experts

Experts discuss transformative technologies shaping India's airport experiences, emphasizing the need for digital ecosystems to manage cybersecurity risks.

LIC raises stake in Dr. Reddy’s

LIC increases stake in Dr. Reddy's Labs to over 8%, acquiring more than 2% since October 2024.

Rupee rises 7 paise to close at 85.80 against U.S. dollar

Rupee gains against dollar on positive equities, Asian currencies, and softening crude oil prices, awaiting RBI policy decision.

Dr. Reddy’s, Alvotech to co-develop, market biosimilar of Merck’s cancer drug Keytruda  

Dr. Reddy's and Alvotech collaborate to develop biosimilar to Keytruda, enhancing oncology capabilities and global reach.

Hyundai Motor exits Ola Electric; sells 2.47% stake for ₹552 crore

Hyundai exits Ola Electric Mobility by selling stake, while Citigroup Global Markets Mauritius acquires 1.95% stake.

Rupee falls 9 paise to 85.96 against U.S. dollar in early trade

Rupee weakens against dollar due to global risk aversion, importer demand, and anticipation of RBI policy review.

© 2008 - 2025 Webjosh  |  News Archive  |  Privacy Policy  |  Contact Us