BRUSSELS (Reuters) – The World Trade Organization (WTO) upgraded its forecast for trade in goods this year due to improvements from June, but saw a more muted rebound in 2021 with further lockdowns from a second wave of COVID-19 infections posing clear risks.
The WTO said on Tuesday that global merchandise trade would fall by 9.2% this year and then increase by 7.2% in 2021. Europe and the Americas would be heaviest hit this year.
That compared with an April forecast of an “ugly” 13-32% decline this year before a rebound of 21-24% in 2021.
The forecast suggested the drop would not be as steep as the 12.8% decline in goods trade during the global financial crisis in 2009, although the recovery would fall short of the 13.8% surge of 2010.
The Geneva-based trade body said aggressive fiscal and monetary policies had supported demand. It also noted that consumers had shifted spending from services, notably travel, to goods.
Trade in medical equipment had surged and in electronic equipment, such as computers, was also strong as millions of people worked from home.
The Geneva-based trade body said its estimates were subject to a high degree of uncertainty surrounding the pandemic and government responses, noting that next year’s pick-up would leave trade well below its pre-pandemic trend.
“One of the risks for the global economy in the aftermath of the pandemic would be a descent into protectionism. International cooperation is essential as we move forward,” WTO deputy director-general Yi Xiaozhun told a news conference.
So far, only a very small share of trade has been affected by new barriers and some, such as export curbs, have been removed.
New lockdowns due to a resurgence of COVID-19 could strip 2-3 percentage points from economic growth, shaving up to 4 percentage points from global trade expansion in 2021.
Conversely, the rapid deployment of a vaccine next year could add 3 percentage points to trade growth.
(Reporting by Philip Blenkinsop, editing by Marine Strauss and Ed Osmond)