In the emerging markets, there has been some improvement, although in some of the larger countries, mainly those that have current account deficits, there have been signs of weakness and fragility in recent months. Together with the moderate recovery, global trade is also expanding.
Graph 6  An important factor underpinning this positive outlook is the lift in Australia’s terms of trade, which are expected to regain their peak of a couple of years ago. This would bring them back to around the very high level they reached in the early 1950s when wool prices spiked at the time of the Korean War (Graph 7).