Brutal slump in global trade as economies face collapse

gLOBAL trade is heading for an ‘ ugly’ slump even more severe than during the financial crisis as the world crashes into recession, according to a leading international watchdog.

the World trade Organisation (WtO) cautioned that trade of goods between countries will fall by 13pc this year as the coronavirus pandemic weighs on economic activity and consumer confidence.

the report came amid warnings that Britain, germany and France – the three biggest economies in europe – as well as the United States are in the grip of historic recessions.

Auditors KPMg said output in the UK fell 4pc in the first three months of the year and will shrink by another 11pc between April and June.

At the same time, germany’s output will decline by almost 10pc in the coming three months, according to a report by the country’s top five economic institutes.

And the Banque de France said the French economy is contracting at the sharpest rate since the Second World War. in the US, the investment giant Pimco said that the world’s largest economy would contract by 30pc in the second quarter of the year.

the Organisation for economic Cooperation and Development said its economic indicators were showing ‘the largest drop on record in most major economies’.

the geneva-based OeCD’s director- general Roberto Azevedo said of the sombre forecasts: ‘these numbers are ugly. But a rapid, vigorous rebound is possible. Decisions taken now will determine the future shape of the recovery and global growth prospects.’

if governments take swift action to keep markets open, and avoid becoming protectionist, global trade could rebound between 21pc and 24pc next year, the WtO said.

in October, the WtO had predicted that international trade would grow by 2.7pc this year, up from 1.2pc last year.