Global export growth seen at -5.6%

The United Nation's trade body has upwardly revised its projection of global merchandise trade for 2020 from a double-digit decline to a single-digit drop. However, it would still be the lowest growth for merchandise export volumes since the 2008 financial crisis.

In June, Unctad had predicted that merchandise trade would see an annual decline of 20 per cent in 2020. In the second quarter, trade had dropped by 27 per cent. However, there has been a recovery in the third quarter and the fourth quarter over the previous quarters. Taking this recovery into account, Unctad now predicts that global merchandise export values and volumes for 2020 are expected to be -5.6 and -8.7 per cent lower than levels seen in 2019.

The third quarter saw a robust recovery in values, which grew by 20.1 per cent from the bleak second quarter. Third quarter official statistics have not yet been released for merchandise export volumes, for which growth is nowcast by Unctad at 8.1 per cent quarter-over-quarter.

The recovery in merchandise export values and volumes is likely to continue in the fourth quarter, though not at quite the same pace. Values and volumes are nowcast to grow in the fourth quarter by 11.6 and 3.3 per cent quarter-over-quarter, respectively. This growth comes despite the continuing spread of Covid-19, especially in the US and Europe, which has necessitated the reinstatement of lockdown measures.