The World Trade Organization (WTO) said on Wednesday its goods trade indicator fell to the lowest level since its launch, indicating global trade was likely to fall “precipitously” in the first half of 2020 due to disruptions caused by COVID-19.
The indicator, launched in July 2016, fell to 87.6 from 95.5 in February, the Geneva-based body said. Readings of less than 100 indicate trade below medium-term trends.
“The current reading captures the initial phases of the COVID-19 outbreak, and shows no sign of the trade decline bottoming out yet,” the WTO said in a statement.
Even before the pandemic, trends had been slowing due to a trade war between major economies like China and the United States and slowing economic growth.
The WTO estimated last month that world merchandise trade could decline between 13% and 32% this year, depending on the duration of the pandemic and the effectiveness of policy responses. The new reading was consistent with that estimate, the statement added.
The body’s trade outlook indicator is a composite of data on export orders in business surveys, air freight, container shipping, car production and sales and trade in electronic components and agricultural materials, particularly wood.
It is designed to identify turning points and gauge momentum in global trade rather than to provide a specific short-term forecast.
Reporting by Emma Farge; editing by John Stonestreet and Mark Potter