World merchandise trade is expected to fall by 9.2 percent in 2020, followed by a 7.2-percent rise in 2021, the World Trade Organization (WTO) said on Tuesday in its revised trade forecast.
In April, the WTO had predicted a decline in the volume of world merchandise trade for 2020 between 13 percent and 32 percent as the COVID-19 pandemic disrupted normal economic activity and life around the world.
"World trade shows signs of bouncing back from a deep, COVID-19 induced slump," explained WTO economists in a press release, adding that "strong trade performance in June and July have brought some signs of optimism for overall trade growth in 2020."
Nevertheless, the WTO's updated forecast for the next year is more pessimistic than the previous estimate of 21.3-percent growth, leaving merchandise trade well below its pre-pandemic trend in 2021.
WTO cautioned that "any recovery could be disrupted by the ongoing pandemic effects."
WTO Deputy Director-General Yi Xiaozhun said in a press conference that the trade impact of the crisis has differed dramatically across regions, with "relatively modest declines" in trade volumes in Asia and "stronger contractions" in Europe and North America.
Senior WTO economist Coleman Nee explained that "China is supporting trade within the (Asian) region" and "China's import demand is propping up intra-regional trade" and "helping to contribute to global demand".
Although the trade decline during the COVID-19 pandemic is similar in magnitude to the global financial crisis of 2008-09, the economic context is very different, WTO economists stressed.
"The contraction in GDP has been much stronger in the current recession while the fall in trade has been more moderate," they said, adding that the volume of world merchandise trade is only expected to decline around twice as much as world GDP, rather than six times as much during the 2009 collapse.