Export led growth is where a significant part of the expansion of real GDP, jobs and per capita incomes flows from the successful exporting of goods and services from one country to another.
In recent years a number of countries have experienced rapid growth across a number of export industries which has helped to fuel their long-run expansion. These nations include China, Ireland, South Korea, Singapore, Hong Kong, Vietnam, Ethiopia and other emerging countries.
Some of them have experienced a marked increase in their trade-to-GDP ratio which measures the total value of trade (exports + imports combined) expressed as a percentage of GDP.
Advantages of export-led growth
Exports of goods and services as a % of GDP for Vietnam
Potential risks and drawbacks from export-led growth
Overall, export-led growth has been important for many countries. The challenge is to make ensure that a country is exporting a sufficiently diverse range of products (e.g. to avoid some of the risks from primary product dependency) and also that the benefits from increased exports and growth are widely dispersed across the population.
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