World trade volume plunged by 7.0% in December from the previous month based on preliminary data, following a drop of 5.3% in November (revised up from a drop of 6.0%). The drops in November and December are without precedent in the data series that reaches back until 1991, according to . The biggest drop before was 1.9% in February 1991 and in March 2008. In December, the strongest import drop occurred in the emerging economies (-11.8%). Japan showed the strongest export drop (-9.9%).

The trade data was issued today by the CPB Netherlands Bureau for Economic Policy Analysis, based in The Hague.

Monthly trade numbers are volatile and focus on quarters is therefore preferable. In the fourth quarter, world trade was down by 22.0% at an annual rate from the preceding quarter (6,0% non-annualised). In the previous quarter, world trade growth was still growing by 8.8%. The drop in the fourth quarter is without precedent. The biggest drop before was a 7.2% drop in the second quarter of 2002. Most noticeable in the last quarter of 2008 is the sharp drop in imports of emerging countries (-21.7%; -5.4% non-annualised) and the sharp drop in Japanese exports (-48.3% annualised; -15.2% non-annualised).

World trade volume growth is on a sharp downward trend, based on twelve months over the previous twelve months. In December, trend growth was 2.4%, down from the record high of 9.5% in November 2006.

According to these preliminary data, world trade volume rose by 2.4% in 2008, a severe deceleration from the growth of 7.6% in 2007.

World trade prices measured in US dollars dropped by 0.9% in December from the previous month, after a drop of 6.0% in November. The drop was mostly due to a drop in energy prices (-21.2%).

Monthly trade numbers are volatile and focus on quarters is therefore preferable. In the fourth quarter, world trade prices were down by 51.4% at an annual rate from the preceding quarter (16.5% non-annualised), the biggest fall in the data series that reaches back until 1991. In the most recent quarter, prices of energy dropped by 94.3% annualised (51.1% non-annualised) and prices of other raw materials by 74.9% (29.2% non-annualised).

Despite the sharp drop in the final quarter, world trade prices rose by 12.1% year-on-year in 2008.