Acta Universitatis Danubius. Œconomica, Vol 5, No 1 (2009)

Abstract

In line with the world economy trend, the collapse in world trade in goods and services observed in the last quarter of 2008 intensified in the first quarter of 2009, but the trough in growth rates has likely been reached; positive quarterly growth rates are expected by the end of 2009. UE-27 registered the slowest export growth of any region last year, with an expansion of just 0.0per cent, down from 3.5 per cent in 2007. Import growth turned negative in 2008, falling by 1 per cent (+3.5 per cent in 2007). If the 27 members of the European Union are considered collectively (excluding internal EU trade), the five leading exporters were the European Union (15.9 per cent of world exports), China (8.9%), the United States (8.1%), Japan (4.9%) and Netherlands (3.9 per cent). Exports from the EU were worth US$ 1.93 trillion in 2008. Signs of recovery are not yet so clearly visible in the EU-27 like in USA, in the last part of 2009. Each country has its own specific combination of weaknesses such as bursting housing bubbles, declining exports and damaged financial sectors. The eventual recovery is likely to be slow as rising unemployment will hit consumer spending. In the above mentioned conditions, GDP in the euro area is expected to contract 4.8% in 2009 and to show 0% growth in 2010. The previous projections were for a 4.1% fall in 2009 and a 0.3% fall in 2010. The main factors with a positive influence, taken into consideration for revising up the projections for 2010 in euro area are: the strengthening growth in world trade which will help support a turnaround in exports, the governmental policy support and an easing of financial conditions adopted in some countries.