World Trade Organization (WTO) economists announced that global trade shows signs of bouncing back from a deep COVID-19 induced slump, but they caution that any recovery could be disrupted by the ongoing pandemic effects.
Strong trade performance in June and July brought some signs of optimism for the overall trade expectations in 2020.
The WTO now forecasts a 9.2% decline in the volume of world merchandise trade for 2020 (less severe than the 12.9% drop previously foreseen), followed by a 7.2% rise in 2021. 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.
As previously noted in the forecast update of 22 June, a weak trade recovery that fails to return trade to the pre-pandemic trend was a distinct possibility. This would result in merchandise trade growth of around 5% next year, rather than 20% in the case of a rapid return to the previous trajectory. The current trade forecast of 7.2% for 2021 appears to be closer to the “weak recovery” scenario than to a “quick return to trend”.