On October 7, the World Trade Organization (WTO) said that there will be a 9.2% decline in the volume of global trade in 2020 and this will be followed by a 7.2% rise in 2021.
According to the WTO press release, Current data suggests a projected decline for the current year that is less severe than the 12.9% drop foreseen under the more optimistic of two scenarios outlined in the WTO’s April trade forecast. Strong trade performance in June and July have brought some signs of optimism for overall trade growth in 2020.
Trade growth in COVID-19 related products was particularly strong in these months, showing trade’s ability to help governments obtain needed supplies. Conversely, the forecast for next year is more pessimistic than the previous estimate of 21.3% growth, leaving merchandise trade well below its pre-pandemic trend in 2021. The WTO press released mentioned the following points
- World merchandise trade volume is forecast to fall 9.2% in 2020.
- The projected decline is less than the 12.9% drop foreseen in the optimistic scenario from the April trade forecast.
- Trade volume growth should rebound to 7.2% in 2021 but will remain well below the pre-crisis trend.
- Global GDP will fall by 4.8% in 2020 before rising by 4.9% in 2021.
- The trade decline in Asia of 4.5% for exports and 4.4% for imports in 2020 will be smaller than in other regions.
- Downside risks still predominate, particularly if there is resurgence of COVID-19 cases in the coming months.
- The 14.3% quarter-on-quarter decline in world merchandise trade in the second quarter is the largest on record, but high-frequency data point to a partial rebound in the third quarter
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