Merchandise trade in Q2, 2020 has registered a historic fall on World Trade Organization’s goods trade barometer based on preliminary estimates. The trade body predicts a partial uptick in trade, but it is uncertain if the recovery could be L-shaped or V-shaped.
WTO’s barometer reading for goods trade of 84.5 is below 100, the baseline which separates below and above-trend growth. The reading is 18.6 points below the prior-year period and at par with the lowest levels during the 2008-09 financial crisis.
Among component indices, automotive products index has reached the lowest since 2007 to 76.5. However, the index for electronic components showed only a modest decline to reach 92.8.
Though these estimates project 13pc decline in world trade compared to WTO’s earlier projected 14pc, recovery in 2021 would most likely be L-shaped. Global trade levels would still be well below the pre-pandemic trajectory. The trade body states a concrete picture would emerge after the release of final data.