World merchandise trade to decline by 13-32% in 2020 due to pandemic COVID-19: WTO
World trade is expected to fall by 13%-32% in 2020 as the pandemic COVID-19 disrupts normal economic activity and life around the world. The wide range of possibilities for the predicted decline is explained by the unprecedented nature of this health crisis and the uncertainty around its precise economic impact. But WTO believes that the decline will likely exceed the trade slump brought on by the global financial crisis of 2008-09. Estimates of the expected recovery in 2021 are equally uncertain, with outcomes depending largely on the duration of the outbreak and the effectiveness of the policy responses.
• World merchandise trade is expected to decline by between 13 and 32% in 2020 due to the pandemic COVID-19.
• A 2021 recovery in trade is expected, but dependent on the duration of the outbreak and the effectiveness of the policy responses.
• Nearly all regions will suffer double-digit declines in trade volumes in 2020, with exports from North America and Asia hit hardest.
• Trade will likely fall steeper in sectors with complex value chains, particularly electronics and automotive products.
• Services trade may be most directly affected by COVID-19 through transport and travel restrictions.
• Merchandise trade volume already fell by 0.1% in 2019, weighed down by trade tensions and slowing economic growth. The dollar value of world merchandise exports in 2019 fell by 3% to around USD 19 trillion.
• The value of commercial services exports rose 2% to around USD 6 trillion in 2019.
Outlook for trade in 2020 and 2021:
The economic shock of the pandemic COVID-19 inevitably invites comparisons to the global financial crisis of 2008-09. These crises are similar in certain respects but very different in others. As in 2008-09, Governments have again intervened with monetary and fiscal policy to counter the downturn and provide temporary income support to businesses and households. But 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. Whole sectors of national economies have been shut down, including hotels, restaurants, nonessential retail trade, tourism and significant shares of manufacturing. In 2021, a rebound in world merchandise trade is expected between 21-24% depending largely on the duration of pandemic COVID-19 and the effectiveness of policy responses.