Deterioration in terms of trade and balance of payments

The price relationships prevailing during the boom of 1950-51 changed in the subsequent period. The substantial fall in raw material prices reduced their purchasing power over food and manufactured goods Within the group of manufactures, the prices of textile products fell while those of engineering products continued to rise. Thus the raw material exporting countries of the region suffered a substantial deterioration in their terms of trade. During the first half of 1952, the terms of trade of the three raw material exporting countries, namely Ceylon, Philippines and Malaya, were about 25 to 40 per cent below the peak levels they had reached in the second half of 1950 or the first half of 1951.

Sustainable Development Goals:

Decent Work and Economic Growth

Reduced Inequalities