In 2020, almost all regions will experience double-digit declines in trade, with North American and Asian exports hit hardest. Due to transportation and travel restrictions, the service industry is most directly affected by COVID-19.
Geneva, Switzerland (Merxwire) – COVID-19 broke out globally, Wuhan, China was the first serious epidemic area of the new coronavirus. The Chinese government announced the closure of the city on January 23. Before this date, many local residents moved to various provinces or abroad, causing the epidemic to be out of control. WHO Director-General Tedros Adhanom’s misjudgment in epidemic prevention has caused Europe and the United States to fall into trouble.
In this health crisis, WTO economists believe that the decline in global trade may exceed the decline in trade caused by the global financial crisis in 2008-09. World merchandise trade is expected to plummet by 13% to 32% in 2020. Experts’ estimates of the expected recovery in 2021 are equally uncertain, and the results depend largely on the duration of the outbreak and the effectiveness of the policy response.
In 2019, under the pressure of continued tensions in international trade, global merchandise trade stalled in 2019, and trade declined by the end of the year. Trade in the fourth quarter was down by 1.0% year-on-year and 1.2% from the third quarter of 2019. Exports from South America and other regions experienced a substantial decline in the second half of 2019, while growth in Europe, North America and Asia was small or slightly reduced. Throughout 2019, imports from South America fell sharply, while imports from Europe, North America and Asia also fell. Imports in other regions continued to grow, with a year-on-year growth of between 1.9% and 4.9% in each quarter of 2019.
The economic impact of the COVID-19 pandemic inevitably compares people with the 2008-09 global financial crisis. These crises are similar in some ways, but very different in others. In 2008-09, the government intervened in monetary and fiscal policies to cope with the economic downturn. This time, the economic impact caused by the outbreak, the government again adjusted the monetary and fiscal policies and provided temporary income support for businesses and households. However, as the spread of the disease reduced labor supply, transportation and travel were directly affected, and many sectors were closed, including hotels, restaurants, non-essential retail, tourism, and a large number of manufacturing industries.
Growth in the value of commercial services exports by category, 2015‑2019 via WTO.org
In most trade data, the impact of the COVID-19 outbreak on international trade has not yet been seen, but some timely and leading indicators may already provide clues about the degree of economic slowdown and early crisis.
With regard to future trade performance, the WTO believes that the situation is relatively optimistic, although trade is now declining sharply, and then will begin to recover in the second half of 2020, for example, people may see a sharp decline in trade volume in 2020 along the pessimistic scenario, but it is also dramatic A rebound, bringing trade closer to the optimistic scenario by 2021 or 2022. The more pessimistic situation is that the initial decline is greater and the recovery time is longer and incomplete.
More information: Download monthly, quarterly and yearly trade statistics on the WTO data portal at data.wto.org