GLOBAL ECONOMY WEEKAHEAD - Global trade comes roaring back

By Emily Kaiser

WASHINGTON (Reuters) - Global trade has staged a remarkable recovery from the depths of last year's panic, even though U.S. consumers -- the world's most reliable customers -- still aren't in much of a buying mood.

This week, trade reports from the world's biggest exporters -- Germany, China and the United States -- are expected to confirm that more goods are moving now that the recession has loosened its grip on the world economy.

Doubts remain about whether the economic revival is sustainable once governments and central banks curb the flow of easy money. But there is reason to believe that trade will hold up thanks to strength in emerging markets.

Uri Dadush, an economist with the Carnegie Endowment for International Peace in Washington and a former director of international trade for the World Bank, said loose money clearly plays its part in the trade rebound, but there is also evidence that demand is rebounding.

"While the private sector is picking up somewhat hesitantly, it is nevertheless picking up -- in this country, in Europe, and it is picking up big-time in Asia, which is a very large part of the picture," he said.

During the worst phase of this crisis, Japanese exports halved from a year earlier and were off by about a third from China. The drop in global trade was a big reason why Germany's economy contracted so sharply in the first half of this year.

U.S. households, stung by an $11 trillion drop in wealth, cut back on all but the bare necessities and are still spending cautiously with unemployment topping 10 percent.

Yet economists polled by Reuters think Germany's exports grew in September after an unexpected drop in August. China's exports are also on mend, although they are still expected to post a sharp year-over-year decline for October.