WTO revises f or ecast f or goods trade to 9.2% fall

The World Trade Organization has revised its forecast to a 9.2 per decline in world merchandise trade volume for 2020, followed by a 7.2 per cent rise in 2021. These estimates are subject to an unusually high degree of uncertainty as they depend on the evolution of the pandemic and how governments respond to it.

The forecast suggested a projected decline for the current year that is less severe than the 12.9 per cent drop foreseen under the more optimistic of the two scenarios outlined in the WTO’S April trade forecast.

Strong performance in June and July has brought in some optimism for overall trade growth in 2020, WTO said.

Trade growth in Covid-19 related products was particularly strong in these months. Conversely, the forecast for next year is more pessimistic than the last estimate of 21.3 per cent growth, leaving merchandise trade well below its pre-pandemic trend in 2021.

Trade performance yearto-date exceeded expectations due to a surge in June and July as lockdowns were eased. The pace of expansion could slow sharply once pent-up demand is exhausted and business inventories have been replenished. More negative outcomes are possible if there is a resurgence of Covid 19 in Q4, WTO said.

In contrast, gross domestic product (GDP) fell more than expected in the first half of 2020, causing forecasts for the year to be downgraded.