Commodity Commotion
IMF Blog, December 21, 2016
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- Commodity Commotion
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Bibliographic details
- Authors: iMFdirect
- Published: December 21, 2016
Definition: terms of trade and commodity terms of trade
- Terms of trade is the price of a country’s exports relative to its imports.
- The commodity terms of trade refers to a country’s commodity exports relative to its commodity imports.
Impact in 2015
- Commodity-exporting economies: terms of trade dropped by an average of about 10 percent of GDP in 2015.
- Commodity-importing economies: experienced about a 2 percent of GDP benefit from the 2015 drop in prices.
Developments in 2016 versus spring 2016 World Economic Outlook projections
- Spring 2016 WEO projection: another 2 percent decrease in the terms of trade for commodity-exporting countries in 2016.
- Actual IMF estimate for 2016 (commodity-exporting countries): decline on average is estimated to have been closer to ½ percent of GDP.
- Note: this smaller decline does not do much to help recuperate the losses suffered in 2015.
- Commodity-importing countries: the IMF estimates the benefit to these economies to have increased by less than ¼ percent in 2016.
- This increase is less than half the projected ½ percent anticipated in the spring 2016 World Economic Outlook projections.
Source: Commodity Commotion, iMFdirect, December 21, 2016