The World Trade Organization (WTO) on Wednesday forecast that goods trade would shrink more steeply this year than during the global financial crisis a decade ago, and then rebound in 2021, as the COVID-19 pandemic recedes – provided countries work together.
The WTO said global trade would fall this year by 13 percent to 32 percent. The variable range is so wide because so much about the economic effect of the coronavirus crisis is still uncertain.
“These numbers are ugly – there is no getting around that,” WTO Director-General Roberto Azevedo said in a statement.
“But a rapid, vigorous rebound is possible. Decisions taken now will determine the future shape of the recovery and global growth prospects.”
Keeping markets open and predictable, he said, would be critical to spurring renewed investment. Countries working together would see a faster recovery than if each country acted alone.
The Geneva-based WTO said for 2021 it is forecasting a rebound in global goods trade of 21-24 percent, depending largely on the duration of the coronavirus outbreak and the effectiveness of policy responses.
The WTO also confirmed that 2019 had ended on a sombre note, with a 0.1 percent decline in goods trade, weighed down by trade tensions, notably between the United States and China, and an economic slowdown.
In October, the WTO forecast trade growth would grow 2.7 percent in 2020 after expanding 1.2 percent in 2019.
It said this year, nearly all regions would suffer double-digit percentage declines in trade, with exports from North America and Asia the hardest hit. Sectors with complex value chains, such as electronics and automotive products, would also see steeper falls.
Services are not included in the WTO’s forecast, but the WTO said trade in this area may be hit hardest by COVID-19 because of transport and travel restrictions.