The World Trade Organization recently released an updated report on “Global Trade Data and Outlook” that, considering the strong rebound in global trade in the third quarter, the overall performance of global trade this year will be better than expected. However, WTO economists also warned that in the medium and long term, affected by uncertain factors such as future development of the epidemic, the road to global trade recovery is still uneven.
Trade performance is better than expected
The report shows that global trade in goods will shrink by 9.2% in 2020, and the performance of global trade may be better than expected. The WTO predicted in April this year that global trade will shrink by 13% to 32% in 2020.
The WTO explained that this year’s global trade performance was better than expected, partly attributable to the implementation of strong monetary and fiscal policies by many countries to support national and corporate incomes, which led to a rapid rebound in consumption and imports after the “unblocking” and accelerated economic activity restore.
Data show that in the second quarter of this year, global trade in goods has experienced a historical decline, with a month-on-month drop of 14.3%. However, from June to July, global trade performed strongly, releasing a positive signal of bottoming out and raising expectations for full-year trade performance.
The trade scale of epidemic-related products such as medical supplies has grown against the trend, which has partially offset the impact of trade contraction in other industries. Among them, personal protective equipment experienced “explosive” growth during the epidemic, and its global trade scale increased by 92% in the second quarter.
WHO Chief Economist Robert Koopman said that although the decline in global trade this year is comparable to that of the 2008-2009 international financial crisis, compared to the shock magnitude of global gross domestic product (GDP) during the two crises, Global trade performance has become more resilient under the epidemic this year. The World Trade Organization predicts that global GDP will fall by 4.8% this year, so the decline in global trade is about twice the decline in global GDP, and the shrinkage in global trade in 2009 is about 6 times that of global GDP.