Lower oil prices should provide current account relief to many countries

The decline in oil and other commodity prices has improved the terms of trade for many developing countries. 
For oil-importing developing countries, lower import and higher export prices have increased incomes by about 1.2 percent of GDP between 2009 and 2008.

For countries such as Fiji, Jordan, and the Seychelles, the estimated impact of these price changes exceeds 10 percent of their GDP.

Other countries with positive gains in their terms of trade (in excess of 5 percent of GDP) are Nicaragua, the Kyrgyz Republic, Togo, Honduras, Lebanon, and Dominica.
Terms-oftrade effects between early 2009 and the average price of 2008 are most pronounced for oil-exporting countries.

On average, oil-exporting developing economies are projected to suffer terms-oftrade losses equivalent to 6.8 percent of their GDP.

The largest income losses are for Equatorial Guinea, the Republic of Congo, the Islamic Republic of Iran, and Azerbaijan, amounting to about a quarter of their 2008 GDP.
For metals-exporting countries, the deterioration in terms of trade has been less marked but is still large—in part because lower food and fuel prices have offset some of the terms-of-trade losses from lower metals prices.¹¹

Compared with 2007—when commodity prices were closer to their current levels—all of these terms-of-trade effects are much more modest.

The impact of lower food prices on terms of trade for most economies will be relatively small, because most food consumed in developing countries is produced domestically.
Exceptions tend to be small island economies and other countries for which food imports account for a large share of overall merchandise imports (such as Benin, Comoros, Eritrea, Haiti, Senegal, Somalia, and the Republic of Yemen).

The region that stands to lose most is the Middle East and North Africa, which is projected to suffer a terms-of-trade decline of close to 12 percent of GDP in 2009, followed by Sub-Saharan Africa, dropping 6.1 percent. 
In contrast, South Asia and East Asia and the Pacific—regions heavily dependent on oil imports—will register the largest terms-of-trade gains: 2.7 and 1.7 percent, respectively.

 ¹¹Metals exports represent close to half of the merchandise export revenues in countries such as Chile, Guinea, Jamaica, the Kyrgyz Republic, Mali, Mauritania, Mongolia, Mozambique, Papua New Guinea, Peru, Surinam, Tanzania, and Zambia.