G20 merchandise trade contracted in value terms in Q4 2022, compared to the previous quarter and measured in current US dollars. Continuing the downward trend from its peakin Q2 2022, exports and imports declined by 3.5% and 3.1%,respectively, reflecting sluggish global demand and decreasing energy prices (Figure 1 and 2). Falling oil pricesweighed especially heavily on merchandise trade in North America, with exports contracting by6.7% in Canada, 5.4% in the United States, and 3.1% in Mexico in Q4 2022.Conversely, merchandise exports grew by 0.9% in the European Union, as strong sales of machinery and transport equipment in Italy, France and Germany partly offset lower shipments of chemical and metal products. In the United Kingdom, exports fell by 1.6% driven down by energy and chemicals. Chinese exports and imports declined by 7.1% and 2.5%, respectively, as strict COVID-19 containment measures weighed on trade, especially in electronics. Weak demand from China placed further strain on trade in East Asia. Korean exports dropped by 8.3%, largely due to falling semiconductor prices, while Japanese exports declined by 1.4%. Lower sales of primary commodities impacted exports from South Africa (down 9.7%), Indonesia (down 7.4%) and Saudi Arabia (down 14.5%).

G20 services trade also declined in value terms in Q4 2022, as measured in current US dollars (Figure 1 and 2). Exports and imports are estimated to have decreased by 0.8% and 1.5% respectively, following the 1.0% decrease and 0.3% increase recorded in Q3 2022. With shipping costs falling back to pre-pandemic levels, the value of trade in transport services sharply contracted across the G20, while travel continued to recover from the COVID-19 lows. Services exports fell by 1.5% in France and by 1.7% in the United Kingdom, while imports declined at slower pace in both countries. In Germany, exports and imports dropped by 1.9% and 3.9%, respectively, despite strong travel expenditure. Italy, on the other hand, saw an increase in exports (up 4.5%) and imports (up 2.9%), reflecting a pick-up in travel. Plummeting transport receipts and recurring lockdowns depressed Chinese exports (down 12.6%). Similarly, Korean exports and imports contracted sharply. In Canada, exports and imports fell by 0.7% and 4.0%. In contrast, the United States posted a 4.3% increase in exports, driven by travel, transport and business services. A rebound in travel also fueled export growth in Japan (up 2.9%), Australia (up 5.0%) and Brazil (up 2.1%).