World trade will show a 13% drop at an annual rate, estimated the World Trade Organization (WTO).
The magnitude of the expected recession in world trade will depend largely on the amount of time it takes to control the Covid-19 pandemic and to find effective treatments.
In particular, China recorded a 9.8% decrease in GDP in the first quarter of 2020 compared to the previous quarter. This is equivalent to an annualized rate of -45 percent.
First quarter GDP growth for the United States in 2020 was -1.2% (-4.8% annualized), while GDP in the euro area was estimated at -3.8% (-14.4% annualized). Big drops are expected for both the United States and the euro area in the second quarter of 2020.
In April 2020, WTO economists estimated that world trade would drop between 13% and 32% in 2020, as the COVID-19 pandemic disrupted normal economic activity and life worldwide.
Subsequent monitoring of trade developments suggests that the decline may be closer to the optimistic scenario, but worse results are still possible if there is a resurgence of the virus.
His pessimistic forecast was that world trade would drop 32% at the annual rate.
The WTO estimated a drop of 18.5% year-on-year in world product trade globally in the second quarter of 2020. According to its statistics, the volume of world merchandise trade decreased at a rate of 3% year-on-year in the first quarter.
In an online event organized by ICC Brazil and the Confederation of Brazilian Industry, Roberto Azevedo, director general of the WTO, affirmed that there is growing concern within that organization about countries that are moving towards self-sufficiency in response to the pandemic.
World trade
World merchandise trade volume decreased 0.1% in 2019, compared with 2.9% growth in 2018. World GDP growth slowed to 2.3%, down from 2.9% a year earlier.
Meanwhile, the dollar value of merchandise trade declined year-over-year, falling 3% to 18.89 trillion in 2019.
Trade decreased more sharply in terms of value than in volume due to falling export and import prices.
Finally, trade in commercial services grew 2% in 2019, compared to 9% in 2018, as growth slowed and trade tensions increased.
