La World Trade Organization (WTO) said on Wednesday (19.08.2020) that its barometer of Merchandise trade hit a record low, suggesting that global merchandise trade recorded a historic drop in the second quarter of 2020 as the coronavirus pandemic took hold.
“Additional indicators point to partial rebounds in global trade and output in the third quarter, but the strength of such a recovery remains highly uncertain: an L-shaped, rather than a V-shaped, path cannot be ruled out,” the WTO said here on its website.
The reading of barometer of 84,5 dropped to 18,6 points from the prior-year period. In normal times, it anticipates changes in the trajectory of trade within a few months, but the volatility caused by the pandemic has reduced its predictive value.
"This reading, the lowest on record in data dating back to 2007, is on par with the low point of the 2008-09 financial crisis., is broadly consistent with WTO statistics released in June, which estimated a decline of 18,5% in merchandise trade in the second quarter of 2020 compared to the same period last year,” the WTO said.
The exact extent of the decline will become clear only when official trade data for April to June become available..
The WTO had forecast in April that global trade in goods would fall by between 13% and 32% in 2020 before rebounding by between 21% and 24% in 2021, but in June He said the swift responses from governments meant his pessimistic scenario for this year was unlikely.
“The WTO’s June statistics imply a 14% drop in the volume of world merchandise trade between the first and second quarters of this year. This estimate, together with the new reading of the Goods Trade Barometer, suggests that global trade in 2020 is evolving in line with the less pessimistic of the two scenarios outlined in the WTO's April forecast “he said on Wednesday.
Source: Reuters
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