The worst-case scenario for global trade in the wake of the COVID-19 pandemic has been avoided, according to economists from the World Trade Organization (WTO).
- World trade fell steeply in the first half of 2020 as the COVID-19 pandemic hit.
- Government and central bank intervention helped stem the losses.
- World Trade Organization economists now say we have avoided the worst-case scenario.
- Risks to the outlook include a second wave of COVID‑19 or trade restrictions.
After the volume of merchandise trade shrank by 3% year-on-year in the first quarter, estimates for the second quarter - when lockdown measures affected the largest share of the global population - show a drop of 18.5%.
“These declines are historically large, but could have been much worse,” the WTO says on its website. The organization’s April forecast predicted trade could fall by 32% in a worst-case scenario.
Even so, there are risks to the outlook, including a second wave of COVID‑19, weaker economic growth, and governments imposing trade restrictions.