2002 Services Trade Balance Drops Like a Rock
Mar 1, 2003
While it remains positive, the decline for 2002 is alarming. Services trade balances have traditionally been the only bright spot in the trade balance picture. A decline of almost $20 billion from 2001-2002 is nothing to sneeze at. Indeed, the 2002 balance is lower than the last services balance recorded as the economy edged out of recession: $66.7 billion in 1992, ten years ago.
Source: Bureau of the Census.
The causes for the decline include decreased exports of travel and passenger fares, coupled with increased imports of insurance services as a result of recovery from the large non-recurring insurance claims resulting from the September 11, 2001 terrorist attacks (imports of insurance services are calculated as premiums paid to foreigners for primary insurance and reinsurance, less claims received).
We can expect this trend to continue into 2003, unfortunately, largely as a result of continuing fallout of international security concerns on travel.
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