Global trade in services stopped growing in Q2

TRADE-SERVICES-TOURISM-TRAVEL:Global trade in services stopped growing in Q2

geneva  October 24, 2012, 23:51 IST

geneva  10 25, 2012, 00:00 IST

 

Global trade in commercial services such as tourism and air travel showed zero growth in the second quarter of 2012 as the Europe Union's appetite shrank 7 percent, preliminary trade figures showed on Wednesday.

The figures, prepared jointly by the World Trade Organization and the U.N. economic thinktank UNCTAD, showed global growth slowing for the fourth consecutive quarter.

Services represent more than two-thirds of global gross domestic product. The UNCTAD/WTO figures cover financial, legal, telecoms and IT services provided across borders, as well as overseas construction projects, but generally exclude foreign affiliates such as bank branches.

The Europe-led slowdown follows a Europe-led boom a year ago. In the second quarter of 2011, global services exports were up 17 percent year-on-year, and exports from the European Union's 27 members were up 20 percent.

European imports experienced a similar downward lurch this year, flipping from 18 percent growth in the second quarter of 2011 to a 7 percent contraction in the second quarter of 2012, having shrunk by 1 percent in the first quarter.

Swiss exports swung even further, from a 24 percent year-on-year rise in the second quarter of 2011 to a 9 percent contraction in the same quarter this year.

That is despite a move by the Swiss National Bank to cap the value of its currency, which should have helped exporters and encouraged tourism in Switzerland.

The quarter's biggest increase in demand came from China, where imports of services grew 23 percent, slightly above the average growth rate in the previous four quarters.

China's exports of services are smaller and grew at the much slower pace of 3 percent in the quarter.

Indonesia's services' exports rose 29 percent, more than twice the rate of a year previously, while South Korea's exports leapt 21 percent after 4 percent growth in the same period of 2011.

The UNCTAD/WTO figures were based on quarterly balance-of-payments statistics taken from the IMF and Eurostat, supplemented with estimates for missing data, as well as national sources.