The World Trade Organization (WTO) has updated its global trade outlook for this year amid the coronavirus disease 2019 (Covid-19) pandemic, projecting it is “unlikely to reach the worst-case scenario.”
In April, WTO forecasted that global trade would decline between 13 percent and 32 percent due to the pandemic and associated lockdown measures implemented by many governments around the world.
“We are currently on track for the more optimistic scenario. If trade volumes rebound by a relatively modest 2.5 percent per quarter for the rest of the year, then the overall decline for 2020 will be around 13 percent,” WTO Director General Roberto Azevêdo said in his video message on Tuesday.
Azevêdo said governments started to relax lockdown measures and travel restrictions, while commercial flights have picked up.
He added the purchasing manager’s index for export orders also started to improve from historic declines in April.
“This is genuinely positive news but we cannot afford to be complacent. A second wave of Covid-19 outbreaks would threaten both lives and livelihoods,” he said. Azevêdo said policy-makers will determine the pace of economic recovery.
“For strong rebounds in output and trade in 2021, fiscal, monetary, and trade policies will all need to pull in the same direction. Closing markets to trade would mean uncertainty, supply shocks, weaker productivity, and lower living standards. Keeping markets open to trade flows would do the opposite,” the WTO chief said.
WTO estimated that global trade in the second quarter of the year registered its largest drop of 18.5 percent year-on-year. PNA