The collapse in euro-zone exports in Q1 – and indeed in Q4 last year – was greater than would be expected from the decline in global demand. Anecdotal evidence suggests that the drying up of trade finance was an additional factor. If the tentative signs of recovery from the sentiment indicators are confirmed, global demand may gradually start improving. But a recent survey among banks worldwide suggests that trade finance will still be costly – and possibly become costlier – this year. This may delay the recovery in euro-zone exports and, when that happens, make it more subdued.
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