Global Economy Unlikely to Reach WTO’s Worst-Case Scenario

GENEVA, SWITZERLAND – World trade fell sharply in the first half of the year, as the COVID-19 pandemic upended the global economy. World Trade Organization (WTO) economists believe that while trade volumes will register a steep decline this year, they are unlikely to reach the worst-case scenario of a 32 percent contraction projected in April. The volume of merchandise trade shrank by 3 percent year on year in the first quarter according to WTO statistics. Initial estimates for the second quarter indicate a year on year drop of around 18.5 percent. As things currently stand, the trade would only need to grow by 2.5 percent per quarter for the remainder of the year to meet the optimistic projection of a 13 percent contraction in 2020. Director-General Roberto Azevêdo says this is genuinely positive news but “we cannot afford to be complacent”. For output and trade to rebound strongly in 2021, fiscal, monetary, and trade policies will all need to keep pulling in the same direction, he says.
(SOURCE: World Trade Organization)