News
World trade shows signs of bouncing back from a deep, COVID-19 induced slump, but World Trade Organization (WTO) economists caution that any recovery could be disrupted by the ongoing pandemic effects.
The WTO now forecasts a 9.2% decline in the volume of world merchandise trade for 2020, followed by a 7.2% rise in 2021. The projected decline is less than the 12.9% drop foreseen in the optimistic scenario from the April trade forecast.
The performance of trade for the year to date exceeded expectations due to a surge in June and July as lockdowns were eased and economic activity accelerated. The WTO has warned the pace of expansion could slow sharply once pent up demand is exhausted and business inventories have been replenished. More negative outcomes are possible if there is a resurgence of COVID 19 in the fourth quarter
According to the WTO, GDP fell more than expected in the first half of 2020 in contrast to trade, causing forecasts for the year to be downgraded. Consensus estimates now put the decline in world market-weighted GDP in 2020 at -4.8% compared to 2.5% under the more optimistic scenario outlined in the WTO's April forecast. GDP growth is expected to pick up to 4.9% in 2021, but this is highly dependent on policy measures and on the severity of the disease.
These estimates are subject to an unusually high degree of uncertainty since they depend on the evolution of the pandemic and government responses to it, the WTO added.
(For the WHO release, access to https://www.wto.org/english/news_e/pres20_e/pr862_e.htm)
