Economic Crisis Hits Exports
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This is the VOA Special English ECONOMICS REPORT.
The economic crisis is claiming another victim: world trade. Last month the World Bank predicted a two percent decrease this year -- the largest drop since the nineteen forties.
Economies that depend on exports for growth have been hit hard. Japanese exports decreased almost twenty-seven percent in November from a year earlier. Japan has the world's second largest economy.
A new report this week from China showed that its economy became the world's third largest in two thousand seven, passing Germany. China could also pass Germany as the world's biggest exporter. But Chinese exports fell almost three percent in December from a year earlier -- the sharpest drop in at least ten years.
A story in the Chinese news magazine Outlook warned that factory closings could lead to unrest as the economy slows.
The latest reports show that German exports in November were down almost twelve percent from the year before.
American exports decreased almost two percent in November from a year earlier. They were down six percent from October -- but imports were down twelve percent. That reduced the monthly trade deficit to the lowest level in five years.
Credit has improved in some cases since the financial crisis worsened in September. But falling demand, including reduced demand for oil, has cut trade around the world. The International Monetary Fund recently called for government spending, tax cuts and international cooperation to support growth.
To ease credit, the Bank of England last week reduced its main interest rate to one and one-half percent -- its lowest ever. The bank was established in sixteen ninety-four. Britain's economy may have shrunk by one percent just in the final three months of last year. The first estimates are expected at the end of January.
This week, Germany's coalition government agreed to an economic aid package worth about sixty-seven billion dollars. The two-year plan calls for spending on public works and a tax cut for low-income Germans. Critics considered an earlier measure too small to fight the recession in Europe's largest economy.
Aides to President-elect Barack Obama have been negotiating with Congress on a two-year recovery plan for the world's largest economy. On Wednesday, Democratic Senator Charles Schumer of New York suggested that the price could reach eight hundred fifty billion dollars.
And that's the VOA Special English ECONOMICS REPORT, written by Mario Ritter. I'm Steve Ember.