It is saddening to note that global trade is expected to drop around 18.5% year-on-year in the second quarter of this year in a huge coronavirus-driven plunge which nonetheless could have been much worse, the World Trade Organization.
The WTO said that in the first quarter, the volume of merchandise trade shrank by three percent compared to the same three months in 2019. “Initial estimates for the second quarter, when the virus and associated lockdown measures affected a large share of the global population, indicate a year-on-year drop of around 18.5%,” the global trade body said in a statement.
Recently, China’s factory activity picked up pace in June, official data showed Tuesday, although analysts warned weak global demand and a potential coronavirus resurgence are weighing on its longer-term recovery. China’s Purchasing Managers’ Index (PMI), a key gauge of activity in factories, came in at 50.9 points in June, better than the 50.5 forecast in a Bloomberg News poll of analysts and up 0.3 points from May.
However, it said the expected plunge was better than the WTO’s worst-case scenario for the COVID-19 pandemic’s impact on global trade — and that the world economy may have bottomed out in the second quarter of the year.”The fall in trade we are now seeing is historically large — in fact, it would be the steepest on record. But there is an important silver lining here: it could have been much worse,” said Roberto Azevedo, WTO Director General.
