The World Trade Organization is predicting a 9.2% drop in merchandise trade this year, saying the hit from the pandemic doesn’t appear to be bad as first thought — though the recovery may be slower than anticipated and could worsen if case counts rise again.
Economists from the Geneva-based trade body revise their earlier prediction of a 12.9 percent plunge in merchandise trade this year. That forecast was presented in April, when COVID-19 case counts were soaring in major economic engines like the Europe Union and the United States.
People walk on Jaffa Street in downtown Jerusalem on October 6, 2020. (Yonatan Sindel/Flash90)
The revision follows improved trade performances in June and July, notably thanks to rising demand for health care goods and electronic equipment.
But likewise, WTO forecasters now predict a 7.2% rise in trade next year, far more “pessimistic” than the April forecast for a 21.3% bounce back. The forecasts exclude trade in services, and focus only on merchandise.
The WTO cautions that any recovery over the medium term will depend on the strength of investment and employment.
— AP
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