World trade in products fell 5% in the first quarter of 2020, the United Nations Conference on Trade and Development (UNCTAD) reported on Friday (12.06.2020)UNCTAD).
“International trade in goods is expected to continue to plummet in the coming months as economies struggle to recover from lockdown measures used to curb the outbreak of Covid-19,” the report said. report.
New UNCTAD projections show that trade in goods would fall 27% in the second quarter and 20% in all of 2020, at interannual rates.
«There is still much uncertainty about the possibility of an economic recovery in the second half of the year."says Pamela Coke-Hamilton, director of international trade at UNCTAD.
«International trade is likely to remain below the levels seen in 2019", he adds, "But to what extent depends on the evolution of the pandemic and the type and scope of policies that governments adopt to try to restart their economies.«.
Source: UNCTAD calculations based on national statistics.
While the coronavirus-induced trade slowdown has spared no one, forecasts show a particularly rapid deterioration for developing countries. While South-South trade experienced a drop of just 2% in the first quarter of the year, UNCTAD data shows a dramatic 14% drop in April.
"For developing countries, while declining exports are likely due to reduced demand in destination markets, declining imports may indicate not only reduced demand but also exchange rate movements, debt concerns and foreign exchange shortages," the report says.
Preliminary data for April suggest the biggest slowdown in South Asia and the Middle East, which could see trade declines of up to 40%. Meanwhile, the East Asia and Pacific regions appear to have fared better, with trade declining in the single digits in both the first quarter of 2020 and April.
China appears to have fared better than other major economies in April, posting 3% growth for exports. But the latest data indicate that the recovery may be short-lived, as the nation's imports and exports fell 8% in May.
The report shows that economic disruptions caused by COVID-19 have affected some sectors significantly more than others.
Source: UNCTAD calculations based on national statistics.
In the first quarter of 2020, textiles and clothing declined by almost 12%, while the office machinery and automotive sectors fell by about 8%. In contrast, the value of international trade in The agri-food sector, which has so far been the least volatile, grew by approximately 2%.
Preliminary data for April indicate further declines in most sectors, with a sharp contraction in trade in energy products (-40%) and automotive products (-50%). Significant declines are also observed in chemical products, machinery and precision instruments, with falls of over 10%.
On the other hand, office machinery appears to have recovered in April, largely due to the positive performance of China's exports.
“Overall, variation across sectors,” the report says, “has been driven by declining demand and disruptions to supply capacity and global value chains due to COVID-19.”
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