Home / Knowledge / News / Textiles / Global trade unlikely to reach worst-case scenario: WTO

Global trade unlikely to reach worst-case scenario: WTO

24
Jun '20
World merchandise trade volume, 2005Q1-2021Q4 (Index, 2015=100).  Source: WTO/UNCTAD and WTO Secretariat estimates
World merchandise trade volume, 2005Q1-2021Q4 (Index, 2015=100). Source: WTO/UNCTAD and WTO Secretariat estimates
World trade fell sharply in the first half of the year 2020, as the COVID-19 pandemic upended the global economy. However, rapid government responses helped temper the contraction, and WTO economists now believe that while trade volumes will register a steep decline in 2020, they are unlikely to reach the worst-case scenario projected in April.

"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 Director-General Roberto Azevêdo. "This is genuinely positive news but we cannot afford to be complacent. Policy decisions have been critical in softening the ongoing blow to output and trade, and they will continue to play an important role in determining the pace of economic recovery. For output and trade to rebound strongly in 2021, fiscal, monetary, and trade policies will all need to keep pulling in the same direction."

In light of available trade data for the second quarter, the April forecast’s pessimistic scenario, which assumed even greater health and economic costs than what had transpired, appears less likely, since it implied sharper declines in the first and second quarters.

The volume of merchandise trade shrank by 3 per cent year-on-year in the first quarter according to WTO statistics. 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 per cent (See Chart above). "These declines are historically large, but could have been much worse," the Geneva-based organisation said in a press release.

The WTO's annual trade forecast of April 20, in light of the large degree of uncertainty around the pandemic’s severity and economic impact, set out two plausible paths: a relatively optimistic scenario in which the volume of world merchandise trade in 2020 would contract by 13 per cent, and a pessimistic scenario in which trade would fall by 32 per cent. "As things currently stand, trade would only need to grow by 2.5 per cent per quarter for the remainder of the year to meet the optimistic projection. However, looking ahead to 2021, adverse developments, including a second wave of COVID-19 outbreaks, weaker than expected economic growth, or widespread recourse to trade restrictions, could see trade expansion fall short of earlier projections," WTO said.

Fibre2Fashion News Desk (RKS)


Must ReadView All

Pic: Shutterstock

Textiles | On 22nd Jun 2021

Investment flows to developing Asia defy COVID-19, grow by 4%: UNCTAD

Foreign direct investment (FDI) flows to developing countries in Asia ...

Pic: Shutterstock

Apparel/Garments | On 22nd Jun 2021

UN prioritising protection of Cambodian garment workers

The United Nations system in Cambodia is working together with...

Pic: JHVEPhoto / Shutterstock.com

Fashion | On 22nd Jun 2021

L Brands announces name of separate company - Victoria's Secret & Co

US-based L Brands has set the ball rolling to create two entities...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

Quality & affordability to affect market acceptability of new fibres

Florian Heubrandner, Lenzing AG

Florian Heubrandner
Lenzing AG

Sustainable and eco-friendly fibres remain in the minority

Textile Industry, Head honchos

Textile Industry
Head honchos

Multi-functional garments will be next big thing

Noemi Sanchez,

Noemi Sanchez

Established since 1846, Evlox is a specialised denim manufacturer with its ...

Shivaani Jain,

Shivaani Jain

Established in 2015, Once Upon A Trunk is a one-stop-shop with almost...

Sanjay Vakharia,

Sanjay Vakharia

One of the first few Indian denim brands, Spykar, established in 1992, was ...

Jacques Prigneaux, EDANA

Jacques Prigneaux
EDANA

EDANA has been the leading global association and voice of the nonwovens...

Daniel Kaye, RocketLife

Daniel Kaye
RocketLife

<div>RocketLife, an award-winning developer of breakthrough visual...

Thomas Ong P S, NanoTextile

Thomas Ong P S
NanoTextile

Malaysian company NanoTextile Sdn Bhd taps into the potentials of...

Aprajita Toor, Aprajita Toor

Aprajita Toor
Aprajita Toor

The creations by Aprajita Toor were born out of a deep desire to create...

Anjali Bhaskar, Samatvam

Anjali Bhaskar
Samatvam

Anjali Bhaskar has an experience of 12 years in the fashion industry. She...

Suman Nathwani, Suman Nathwani

Suman Nathwani
Suman Nathwani

Designer <b>Suman Nathwani</b> talks about her journey of opening a...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


June 2021

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search