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Trade rebounds but recovery still uncertain

[ October 6, 2020   //   ]

Global trade shows signs of bouncing back from the Covid slump said the World Trade Organization but cautioned 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 but said the estimates are subject to an unusually high degree of uncertainty since they depend on the evolution of the pandemic and government responses to it.

Strong trade performance in June and July have brought some signs of optimism for overall trade growth in 2020, with growth in products to fight the pandemic particularly strong. But 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 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 in the fourth quarter.

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