The World Trade Organization forecasts only a 9.2% decline in international trade this year before rebounding 7.2% next year. The public support measures made it possible in particular to avoid a darker scenario.
Global trade should avert catastrophe. “International value chains and global trade have proven to be resilient,” said Robert Koopman, chief economist of the World Trade Organization (WTO), during a press briefing in Geneva.
By publishing his new forecasts this Tuesday, the policeman of world trade is only expecting a 9.2% decline in trade in goods this year. A spectacular figure but less bad than the plunge of 12.9% predicted last April , at the height of the pandemic crisis, in the most optimistic scenario of the organization.
This decline is comparable, by its magnitude, to that recorded during the financial crisis of 2008. But, underlines the WTO, the decline in trade in goods would be twice the decline in world GDP and not six times as during the 2008 financial crisis. It is nowhere near as encouraging for trade in services, which plunged 23%, far from 9% during the 2008 financial crisis.
By region, North America (-14.7%) and Europe (-11.7%) are likely to suffer more from a contraction in exports this year, with Asian countries only recording a decline of 4.5%. These figures should undoubtedly be seen as a maintenance in the state of production value chains which have not fundamentally changed. “Production processes don’t change overnight,” explained Barbara d’Andréa Adrian, statistician at the WTO. Even if we can expect a reorganization of these global production chains to the detriment of China, said Robert Koopman.
The Automobile at Half Mast
Obviously, depending on the market sectors, the results are different. Automotive industry products recorded the sharpest drop of all categories during the second quarter (just over 50%) ahead of luxury items (handbags, luggage, etc.), which fell by nearly 40%. In contrast, pharmaceutical products (+ 10%), electronic items such as integrated circuits and computers posted growth.
Trade in electronic products was maintained during the crisis, with households, businesses and administrations having modernized their computers and digital infrastructure to facilitate teleworking in particular, underlines the WTO.
Personal protective equipment trade also recorded explosive growth of 92% in the second quarter and 122% in May. “In the first six months alone, sales of face masks, mainly from China, increased 87% to $ 71 billion compared to the same period of the previous year” , commented Barbara of Andrea Adrian . Likewise, trade in agricultural products held up better than average, falling just 5% in the second quarter.
Bounce Back Next Year
For next year, economists are reasonably optimistic, advancing growth of 7.2%. The WTO specifies, however, that the trend will be significantly lower than that observed before the health crisis. Above all, this forecast remains subject to the absence of a second pandemic wave and new containment measures.
“Worse results are still possible if there is a strong resurgence of the Covid-19 crisis in the coming months , ” warned Deputy Director General Yi Xiaozhun at this press conference. “Autumn and winter have a lot of uncertainties,” added Robert Koopman. “Asian exports have been strong, but for these exports to be sustained, demand is high. Much depends on the revival of governments, ” he warned.