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Highlights:
- US imports in April dropped sharply amid inflation concerns.
- The declining imports helped narrow the US trade deficit from a record high in March.
- The World Bank has warned that inflation and sluggish growth to hit global trade this year.
US imports dropped significantly in April as demand for foreign goods slowed, helping to reduce its record trade deficit recorded in March, the Commerce Department said on Tuesday.
The data showed the trade gap in goods and services shrunk by 19.1% to a seasonally adjusted US$87.1 billion in April from the previous month.
The March trade deficit was at a record of US$107.7 billion.
Imports tanked 3.4% to US$339.7 billion in April, the first month-on-month decline since July 2021. Imports of goods such as computers, finished metal, household goods, clothing, toys, pharmaceutical products, etc., dropped in the month.
On the other hand, exports grew by 3.5% to US$252.6 billion in April, the Commerce Department said.
The World Bank has warned that high prices and slow growth could slow global trade in 2022.
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Current macroeconomic factors could hit global trade
The unfavorable conditions like tepid global economic growth, pandemic-related interruptions, and the Russia-Ukraine crisis are likely to impact international trade in the months to come.
The World Bank has also lowered its global growth forecast Taking a gloomy view of the year ahead. It has lowered its 2022 growth forecast to 2.9% versus the 4.1% predicted in January.
The major reason for the downgrade is the Russian invasion of Ukraine, hurting supply chains, investment, trade, demand, governments withdrawing monetary policies, etc., the Bank said.
Bottom line:
The drop in US imports contrasts sharply with the trend in the preceding months. It has also come when the commodity markets are slowing down with soaring prices triggered by the war. However, consumer demand for goods and services grew in April, braving the high US inflation.
