The terms of trade of imported and exported goods in July were 1.4 percent lower than in the same month last year. Prices of imported goods in July were nearly 8 percent up on July 2007, while prices of exported goods were over 9 percent higher.
For the eleventh month in a row, terms of trade deteriorated in July. The increase of import prices was larger than the increase of export prices.
The increase in import prices is partly caused by the increase of prices of raw materials. The price of one barrel of petroleum (North Sea Brent) stood at 76 dollar a year ago, while in July it was 135 dollar on average. The cheap dollar keeps oil prices in check. In the time span of one year, the price of the U.S. dollar dropped 73 to 63 eurocent. This is reflected in an oil price of 55 euro in July 2007 and 85 euro in July 2008. This is an increase of 55 percent.
More information can be found in the article “Changes in the terms of trade in goods”.
Changes in terms of trade