Global trade may drop to historic low in Q2: WTO

World merchandise trade may decline to a historic low in the second quarter of 2020, according to the latest reading of the World Trade Organization (WTO)

WTO’s Goods Trade Barometer, released Wednesday morning in Geneva, showed that the current barometer reading of 84.5 is 15.5 points below the baseline value of 100 for the index and 18.6 points down from the same period of last year.

“This reading – the lowest on record in data going back to 2007, and on par with the nadir of the 2008-09 financial crisis – is broadly consistent with WTO statistics issued in June,” said a press statement of the WTO.

The June statistics estimated an 18.50 per cent decline in global merchandise trade in the second quarter of 2020 as compared to the same period last year.

“The exact extent of the fall in trade will only be confirmed later this year when official trade volume data for the period from April to June becomes available,” added the statement.

However, as WTO economists warned in June, the heavy economic toll of the Coivd-19 pandemic suggests that the projections for a strong, V-shaped trade rebound in 2021 may prove ‘overly optimistic’.

“As uncertainty remains elevated, in terms of economic and trade policy as well as how the medical crisis will evolve, an L-shaped recovery is a real prospect,” said the statement. “This would leave global trade well below its pre-pandemic trajectory.”

WTO’s GTB is a real-time gauge of trends in global trade.