World trade is showing signs of recovery after the slowdown caused by the Covid-19 pandemic, but the recovery still remains uncertain, according to a report from the World Trade Organization, WTO. The global entity’s new world trade volume projections are for a decrease of 9.2% for 2020 followed by a 7,2% increase next year.
In April, with many economies completely closed down, WTO forecasted a much larger contraction for 2020, between 12% and 32%. But a 7.2% rise next year will still be well below the pre-crisis trend.
WTO says trade is currently experiencing a recovery in exports and imports, but there are still exceptionally high uncertainties, as the projections depend on the evolution of the pandemic and the responses given by governments.
WTO estimates a 4.8% decline in the global Gross Domestic Product (GDP) this year, but growing 4.9% in 2021. Likewise Asia’s decreased exports (-4.5%) and imports (-4.4%) will be less marked this year than in other regions.
In the second quarter of 2020, world trade in goods suffered the strongest decline ever recorded, with a 14.3% decrease compared to the previous period. But June and July showed positive results, sparking new optimism about global growth of exports and imports.
However WTO warns that the risks of a new downturn remain high, especially if the pandemic increases in the coming months. Projections for South and Central America are now improving, with exports falling by 7.7% and imports by 13.5%. In April, WTO had estimated a decrease of between 12.9% and 31.3% in exports, depending on the positive or negative scenario. Imports could fall between 4.3% and 11%. WTO’s projections were made only based on goods.