Geneva: Global trade growth is expected to plummet by up to a third in 2020 due to the coronavirus pandemic, the World Trade Organisation (WTO) said Wednesday. It warned that the numbers would be ‘ugly’.
“World trade is expected to fall by between 13 to 32 per cent in 2020 as the coronavirus pandemic disrupts normal economic activity and life around the world,” the WTO said in a statement.
There are a wide range of possibilities for how trade would be hit by the ‘unprecedented’ health crisis, the WTO added.
However, WTO chief Roberto Azevedo warned the downturn ‘may well be the deepest economic recession or downturn of our lifetimes’.
In its main annual forecast, the 164-member WTO pointed out that trade had already been slowing in 2019, before the emergence of the coronavirus. But the virus has now infected some 1.4 million people since late last year, killing more than 80,000 and forcing governments across the world to take radical measures.
More than half of humanity has been asked to stay at home and economic activity has ground to a virtual standstill in many places.
Global trade, already hit by trade tensions and uncertainties around Brexit, is expected to register ‘double-digit declines in trade volumes’ in nearly all regions this year, the WTO said.
“This (coronavirus) crisis is first and foremost a health crisis which has forced governments to take unprecedented measures to protect people’s lives,” Azevedo said in a statement.
“The unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself,” Roberto Azevedo added.
Before the current crisis, trade tensions, uncertainty and slowing economic growth weighed on global merchandise trade, which registered a slight decline of 0.1 per cent in 2019 after rising 2.9 per cent a year earlier.
The dollar value of world merchandise exports fell by three per cent to USD 8.89 trillion, the WTO said.
World commercial services trade fared better in 2019, with exports in dollar terms rising by two percent to $6.03 trillion, but the expansion was far slower than in 2018, when services trade increased by nine per cent, said the WTO.
The WTO said that while the global shock might invite comparisons to the financial crisis of 2008-2009, the situation now is worse.
“Restrictions on movement and social distancing to slow the spread of the disease mean that labour supply, transport and travel are today directly affected in ways they were not during the financial crisis,” the WTO said.
“Whole sectors of national economies have been shut down, including hotels, restaurants, non-essential retail trade, tourism and significant shares of manufacturing. Hence developments remain very uncertain,” the WTO added.
Agencies