Global trade rebounds

Global demand, the most significant economic indicator, was the first casualty of the economic downturn that had spread out of the US to the world in September 2008. The financial meltdown that followed numbed consumers and starved them of credit. But in the last quarter of 2009, there have been the first signs of a revival of demand.

Global exports finally bounced back in the October to December period—well after several other economic indicators had recovered. Indian exports, which, too, had been contracting since October 2008, have rebounded starting November 2009. Is this convergence between the global and Indian trade fortuitous or a definitive sign of the return of the global consumer? The robust trends certainly are encouraging.

India's exports ended their 12-month long contraction in November 2009, growing a healthy 18.2 per cent over November 2008. Merchandise trade volumes of the Group of Seven (G7) countries grew 5.5 per cent in October-December 2009 for the first time since they started shrinking in the July-September quarter of 2008. The decisive return to business of the global consumer should help sustain the incipient global economic recovery.