as output declined but also translates to a more rapid recovery as the recession ends (Freund 2009)<sup>6</sup> .

Trade in certain sectors and products have been more affected than others. Exports of durable goods have been most affected. Specifically, disaggregated monthly data for the U.S. and Japan show that some industries are harder hit such as mineral products, transportation equipment, metals, and stone and glass, while others such as have seen an increase in trade. In Brazil, most sectors faced export revenue reductions in January 2009, but the automotive sector has been particularly hit. Exports from lean retailing industries such as Textile and Clothing were also affected, in particular in countries where this sector represents a large part of export revenues such as in Indonesia, Tunisia, and Turkey. Trade of non-durable consumer goods such as cell phones, food and tobacco products have declined least, as demand for these products is less likely to be put off as long.

Commodity exporters such as Sierra Leone, Kenya and Peru have mainly suffered from the drop in commodity prices. A number of commodity prices from agricultural products to minerals and energy have abruptly dropped in the second half of 2008, after reaching a peak in previous months. In Sierra Leone, diamond and rutile exports (79 percent of exports) reduced by 50 percent and 20 percent respectively. For Peru, commodity exports (minerals, fish oil/meal and coffee) dropped 20 percent in the last quarter of 2008 compared to the same period in 2007. Ghanaian exports have remained strong with the price of its traditional exports such as Cocoa, Gold and Timber continued to increase.

Exports of services have generally proven to be more resilient (Mattoo and Brochert 2009). The resilience of services trade is mostly a reflection of relatively robust demand for business-related professional (e.g., insurance, telecommunications) and technical services (e.g., legal and IT outsourcing). The value of trade in services such as transportation of goods and people and tourism has fallen in line with the merchandise average, but business process outsourcing is still registering positive growth rates (albeit much lower than pre-crisis)<sup>7</sup> .

**_C. Firms report that the drop in exports is mainly due to lack of new orders and lack of finance from buyers_**

Two-thirds of the respondents declared that their exports dropped sharply between September 2008 and March 2009, in particular firms in India, Indonesia, Peru, Tunisia, and Turkey (Figure 3). The picture is more balance in the other countries where about the same number of firms have experienced either a drop or an increase in their exports. Similarly, 71 percent of respondents have reported a decrease in their imports since September 2008. This spans firms from different size and sectors. The survey indicates that large firms have reported a decline in their imports to a larger extent than to SMEs, most likely reflecting their capacity to cut on imports and rely on larger inventories in times of gloomy economical prospects. On the contrary, SMEs seem to have been more affected than large firms with regard to exports as they tend to rely on fewer clients and

> 6 Freund Caroline, 2009, “ _The trade response to global downturns: historical evidence”,_ Policy Research Working Paper 5015, World Bank 7 In Egypt, services exports dropped due mainly to a drop in Suez Canal receipts and a contraction in tourism revenues, affected by the decline in the number of tourist nights on the back of the worsening global economic conditions.

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