WTO forecasts 9.2% YoY drop in world trade in 2020

According to the World Trade Organization (WTO), world trade is showing signs of recovery after the slowdown caused by the Covid-19 pandemic, but the recovery still remains uncertain. The global entity’s new world trade volume projections are for a decrease of 9.2% for 2020 and then an increase of 7.2% in 2021.

In April, with many economies completely closed down, the WTO had projected a much larger contraction for 2020, of between 12% and 32%. But a 7.2% rise next year will still be well below the pre-crisis trend.

The WTO is currently experiencing a recovery in exports and imports, but there are still exceptionally high uncertainties, as the projections depend on the evolution of the pandemic and the responses given by governments.

The entity estimates a 4.8% decline in worldwide Gross Domestic Product (GDP) this year, growing 4.9% again in 2021.

The following graph shows a comparison of container movement in the ECSA region since 2017:

Asia’s decreased exports (-4.5%) and imports (-4.4%) will be less marked this year than in other regions.

In the second quarter of 2020, world trade in goods suffered the strongest decline ever recorded, with a 14.3% decrease compared to the previous period. But June and July showed positive results, sparking new optimism about the global growth of exports and imports.

The WTO warns, however, that the risks of a new downturn remain high, especially if the pandemic increases in the coming months. Projections for South and Central America are now improving, with exports falling by 7.7% and imports by 13.5%. In April, the WTO had estimated a decrease of between 12.9% and 31.3% in exports, depending on the positive or negative scenario. Imports could fall between 4.3% and 11%.  WTO’s projections were made uniquely based on goods.

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