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Trade rebounds marginally in Q3, stays negative: UNCTAD

Oct '20
The United Nations Conference on Trade and Trade and Development (UNCTAD) recently forecast a 7-9 per cent year-on-year (YoY) drop in the value of global trade for 2020, despite signs of a rebound in the third quarter (Q3). In its quarterly Global Trade Update, UNCTAD estimates world trade to be about 5 per cent less in Q3 than during the same period in 2019.

This is an improvement from the 19 per cent YoY decline recorded in the second quarter this year, but still insufficient to pull trade out of the red, UNCTAD said in a press release.

Preliminary forecasts put YoY growth for the fourth quarter at 3 per cent less. But this figure is still uncertain due to concerns about how the COVID-19 pandemic will evolve and affect economic activity in the coming months.

The report highlights China’s notable trade recovery. The country’s exports, after falling in the early months of the pandemic, stabilised in the second quarter and rebounded strongly in the third, with YoY growth rates of almost 10 per cent. Contrary to other major economies, Chinese imports stabilised in July and August and grew by 13 per cent in September.

Exports from developing countries fared better than those of developed nations. The YoY growth of developing economies’ exports improved from minus 18 per cent in the second quarter to minus 6 per cent in July, while those from developed nations increased from minus 22 per cent to minus 14 per cent.

No region was spared from the fall in international trade in the second quarter, but the sharpest decline was for the West and South Asia regions, where imports dropped by 35 per cent and exports by 41 per cent, UNCTAD said in its report. As of July, the fall in trade remained significant in most regions except for East Asia.

A rise in demand for home office equipment and personal protective gear has resulted in strong growth rates for trade in the sectors of communication equipment, office machineries, and textiles and apparel.

Trade in COVID-19 medical supplies grew by an average of more than 50 per cent since April 2020, but the increase in such trade has primarily benefited residents of wealthier nations.

Since the outset of the pandemic, each resident of high-income countries has benefited on average from an additional $10 per month of imports of COVID-19 related products, compared with just $1 for people living in middle-income countries and a mere $0.10 for those in low-income countries.

Overall, per capita imports of medical goods essential to mitigate the pandemic have been about 100 times higher for high-income countries than for low income nations, UNCTAD added.

Fibre2Fashion News Desk (DS)

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