The annual report of the Executive Directors of the International Monetary Fund for the fiscal year ending April 30, 1953, was transmitted to the Chairman of the Board of Governors on July 1, 1953. By the beginning of 1953, the report noted, the foreign exchange imbalance and the internal inflationary pressures, which had been engendered by the outbreak of the Korean war and the subsequent speculative inflationary boom, were being successfully combatted in most countries. The widespread payments crisis of early 1952 had affected the raw materials producing countries most severely; falling raw materials prices, resulting in reduced income, had been coupled with increased demands for imports, resulting from higher domestic incomes and the requirements of development projects. Export countries, especially those which relied on raw materials producers for dollar earnings, were also affected by the price fluctuations. Measures adopted in the various affected countries to combat the payments imbalances and the reduction of excessive inventories led to a sharp contraction in the volume of world trade in 1952; by the third quarter, the value of world imports was 10 percent less than the previous year. The United States did not contribute markedly to this decline; in fact, for the year as a whole the volume of United States imports was 5 percent greater than in 1951, although this was primarily due to a great increase in the last quarter of the year. Declines in the volume and value of world trade, it was feared, might lead to further progressive deterioration; however, by the beginning of 1953, the greater part of the distortions initiated by the outbreak of Korean hostilities had been eliminated.