After shrinking 3 per cent in the first quarter of 2020, global trade volumes shrank by up to 18.5 per cent in the second quarter of the current year due to the ongoing coronavirus pandemic, the World Trade Organisation (WTO) said on Monday.
Initial estimates for the second quarter, when the virus and associated lockdown measures affected a large share of the global population, indicate a year-on-year drop of 18.5 per cent. However, the WTO said global trade volumes in 2020 seem closer to contracting by 13 per cent and not the worst-case scenario of 32 per cent indicated initially.
"Looking ahead to 2021, adverse developments, including a second wave of Covid-19 outbreaks, weaker-than-expected economic growth, or widespread recourse to trade restrictions, could see trade expansion fall short of earlier projections," the WTO said.
Back in April, the WTO's annual trade forecast had stressed volume of world merchandise trade in 2020 may contract by 13 per cent in a relatively optimistic scenario, while the fall may be up to 32 per cent in a pessimistic one. Now, trade economists at the global body say trade would only need to grow by 2.5 per cent per quarter for the remainder of the year to meet the optimistic projection.
Global commercial flights, which carry a substantial amount of international air cargo, were down nearly three quarters (-74 per cent) between January 5 and April 18, and have since risen 58 per cent through mid-June. Container port throughput have also staged a partial recovery in June compared to May. Meanwhile, indices of new export orders from purchasing managers' indices also started to recover in May after record drops in April.
"The outlook for the global economy over the next two years remains highly uncertain. For output and trade to rebound strongly in 2021, fiscal, monetary, and trade policies will all need to keep pulling in the same direction," said WTO Director General Roberto Azevedo.
The World Bank's recent forecast would see global output decline by 5.2 per cent in 2020. Merchandise trade volume already fell by 0.1 per cent in 2019, weighed down by trade tensions and slowing economic growth. Global merchandise exports in 2019 fell by 3 per cent to $18.89 trillion, while the value of commercial services exports rose a modest 2 per cent to $6.03 trillion in 2019.