The West’s imports will remain subdued if it follows trends from previous financial crises, a working paper published last week by the International Monetary Fund (IMF) suggests.
Such a development would pose problems for countries continuing to focus on exports.
According to the study the imports of crisis-hit countries will be lower “for a protracted period”, judging by data from 1970-2009. Such an outcome would hit countries which focus on exports to the West. (article continues below)
By contrast, the IMF says, crisis-hit countries do not tend to suffer reduced exports over an extended period.
Such an outcome would give hope to western countries eager to reduce trade deficits and rebalance away from domestic consumption towards export markets.
Some investors say China falls into this category. According to the World Trade Organization, in 2009 China’s exports were $1.3 trillion (£800 billion), or about a quarter of its GDP.