PRESS/862  
 
6 October 2020  
(20-6808) Page: 1/12 
    
 
 PRESS RELEASE  
E M B A R G O  
N O T  F O R  P U B L I C A T I O N  O R  D I S T R I B U T I O N  B Y  N E W S  A G E N C I E S  U N T I L  
1 5 : 0 0  G E N E V A  T I M E  6  O C T O B E R  
 
TRADE STATISTICS AND OUTLOOK  
Trade shows signs of rebound from COVID -19, recovery still 
uncertain  
World tra de shows signs of bouncing back from a deep, COVID -19 induced slump, but World Trade 
Organization economists caution that any recovery 
could be disrupted by the ongoing pandemic 
effects.  
 
The WTO  now forecasts a 9.2% decline in the 
volume of world merchand ise trade for 2020, 
followed by a 7. 2% rise in 2021 (Chart 1).  These 
estimates are subject to an unusually high degree 
of uncertainty since the y depend on the evolution  
of the pandemic and government responses to it.   
 
Current data suggests a projected dec line for the 
current year that is less severe than the 12.9% 
drop foreseen under the more optimistic of two 
scenarios outlined  in the WTO's April trade forecast.  
Strong trade performance in June and July have 
brought some signs of optimism for overall trad e 
growth in 2020. Trade growth in COVID -19 related 
products was particularly strong in these months, 
showing trade's ability to help governments obtain 
needed supplies. Conversely, the forecast for next 
year is more pessimistic than the previous estimate 
of 21.3% growth, leaving merchandise trade well 
below its pre -pandemic trend in 2021 (Chart 1).  
 
The performance of trade for the year to date 
exceeded expectations due to a surge in June and 
July as lockdowns were eased and economic 
activity accelerated.  The pace of expansion could MAIN POINTS  
• World merchandise  trade volume  is 
forecast  to fall 9.2%  in 20 20. 
• The projected decline is less than the 
12.9% drop foreseen in the optimistic 
scenario from the April  trade forecast.  
• Trade volume growth should rebound 
to 7. 2% in 202 1 but will remain well  
below the pre -crisis trend.  
• Global GDP will fall by 4. 8% in 2020 
before rising by 4.9% in 2021.    
• The trade decline in Asia of 4. 5% for 
exports and 4.4% for imports in 2020 
will be smaller than in other region s. 
• Downside risks still predominate, 
particularly if there is resurgence of 
COVID -19 cases in the coming months.  
• The 14.3% quarter -on-quarter decline in 
world merchandise trade in the second 
quarter is the largest on record, but 
high -frequency data point to a partial 
rebound in the third quarter.  PRESS/862  
 
- 2 - 
 
  slow sharply once pent up demand is exhausted and business inventories have been replenished. 
More negative outcomes are possible if there is a resurgence of COVID -19 in the fourth quarter.   
 
In contrast to trade, GDP fell more t han expected in the first half of 2020, causing forecasts for the 
year to be downgraded. Consensus estimates now put the decline in world market -weighted GDP 
in 2020 at -4.8% compared to -2.5% under the more optimistic scenario outlined in the WTO's 
April forecast. GDP growth is expected to pick up to 4.9% in 2021, but this is highly dependent on 
policy measures and on the severity  of the disease (Table 1).  
 
Chart 1 - World merchandise trade volume, 2000 ‑2021 
Indices, 2015=100  
405060708090100110120130140
Merchandise trade Trend 1990-2008 Trend 2011-2018
 
Source:  WTO Secretariat.  
Note:  Figures for 2020 and 2021 are projections.  
As previously noted in the forecast update of 22 June, a weak trade recovery that fails to return 
trade to the pre -pandemic trend was a distinct possibility. This would result in merchandise trade 
growth of around 5% next year, rather than 20% in the case of a rapid return to the previous 
trajectory. The current trade forecast of 7. 2% for 2021 appears to be closer to the "weak 
recovery" scenario than to a "quick return to trend".  
 
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. The contraction in GDP has been 
much stronger in the current recession while the fall in trad e has been more moderate. As a result, 
the volume of world merchandise trade is only expected to decline around twice as much as world 
GDP at market exchange rates, rather than six times as much during the 2009 collapse.  
 
This divergent performance of trad e during the COVID -19 outbreak has much to do with the 
nature of the pandemic and the policies used to combat it. Lockdowns and travel restrictions 
imposed significant supply -side constraints on national economies, drastically reducing output and 
employmen t in sectors that are usually resistant to business cycle fluctuations, particularly non -
traded services. At the same time, robust monetary and fiscal policies have propped up incomes, 
allowing consumption and imports to rebound once lockdowns were eased.  PRESS/862  
 
- 3 - 
 
  Whether the recovery can be sustained over the medium term will depend on  the strength of 
investment and employment. Both could be undermined if confidence is dented by new outbreaks 
of COVID -19, which might force government s to impose additional lockdown s. As a result, risks to 
the forecast are firmly on the downside. There is some limited upside potential if a vaccine or other 
medical treatments prove to be effective, but their impact would be less immediate.  
 
Ballooning public debt could also weigh on t rade and GDP growth over the longer term. Although 
rich countries are unlikely to face sovereign debt crises as a result of fiscal expansion, poorer ones 
may find their increased debt burdens extremely onerous. Deficit spending could also influence 
trade b alances, reducing national saving and swelling trade deficits in some countries.  
 
"The incidence of COVID -19 worldwide has fallen from its peak in the spring, but it remains 
stubbornly high in many areas. Trade has played a critical role in responding to t he pandemic, 
allowing countries to secure access to vital food and medical supplies . Trade has also facilitated 
new ways of working during the crisis through the provision of traded IT products and services. 
One of the greatest risks for the global economy  in the aftermath of the pandemic would be a 
descent into protectionism. International cooperation is essential as we move forward, and the 
WTO is the ideal forum to resolve any outstanding trade issues stemming from the crisis ," Deputy 
Director -General Yi  Xiaozhun said.  
 
Table 1: Merchandise trade volume and real GDP, 2015 -2021a 
Annual % change  
2015 2016 2017 2018 2019 2020 2021
Volume of world merchandise tradeb2.3 1.4 4.7 2.9 -0.1 -9.2 7.2
Exports
North America 2.6 0.7 3.4 3.8 1.0 -14.7 10.7
South and Central America 0.6 1.3 2.9 0.1 -2.2 -7.7 5.4
Europe 2.9 1.1 3.7 2.0 0.1 -11.7 8.2
Asia 1.3 2.3 6.7 3.7 0.9 -4.5 5.7
Other regionsc1.8 3.5 0.7 0.7 -2.9 -9.5 6.1
Imports
North America 5.2 0.3 4.4 5.2 -0.4 -8.7 6.7
South and Central America -7.6 -9.0 4.3 5.3 -2.1 -13.5 6.5
Europe 3.6 3.0 3.0 1.5 0.5 -10.3 8.7
Asia 2.1 2.2 8.4 4.9 -0.6 -4.4 6.2
Other regionsc-3.9 -4.5 3.4 0.3 1.5 -16.0 5.6
Real GDP at market exchange rates 2.8 2.4 3.1 2.8 2.2 -4.8 4.9
North America 2.8 1.7 2.4 2.8 2.1 -4.4 3.9
South and Central America -0.8 -2.0 0.8 0.6 -0.2 -7.5 3.8
Europe 2.4 2.1 2.8 2.1 1.5 -7.3 5.2
Asia 4.3 4.2 4.8 4.1 3.9 -2.4 5.9
Other regionsc1.5 2.4 1.9 2.1 1.4 -5.5 3.5
 
a Figures for 2020 and 2021 are projections.  
b Average of exports and imports.  
c Other regions comprise Africa, Middle East and Commonwealth of Independent States  (CIS), 
including associate and former member States.  
Source:  WTO Secretariat for trade, consensus estimates for GDP.  PRESS/862  
 
- 4 - 
 
  As Table 1 shows, all regions are expected to see big percentage increases in export and import 
volumes in 2021, but it should be noted that this growth will be off of a reduced base. Thus , even 
large percentage changes may not translate into better material conditions. For example, imports 
into Asia and South America are both expected to grow by 6.2% and 6.5% respectively next year, 
but Asia’s rise would follow on a modest 4.4% decline this year while South America’s would be on 
top of a steep 13.5% plunge in 2020. In this case Asia’s imports would have substantially 
recovered while South America’s trade would still be deep ly depressed.  PRESS/862  
 
- 5 - 
 
   
 
 UPSIDE AND DOWNSIDE RISKS TO THE FORECAST  
This box examines some of the risks associated with the forecast and other factors that 
might be relevant for trade over the medium -to-long term. According to recent estimates, a 
resurgence of C OVID -19 requiring further lockdowns could reduce global GDP growth by 
2 to 3 percentage points next year. Other downside risks include an uncertain outlook for 
fiscal policy and challenging job markets in many countries. Together, these risks could 
shave u p to 4 percentage points off of world merchandise trade growth in 202 1. 
On the other hand, rapid deployment of an effective vaccine could boost confidence and 
raise output growth by 1 to 2 percentage points in 202 1. This would add up to 3 percentage 
points  to the pace of trade expansion. Other factors could contribute to better trade 
outcomes, including wealth effects from strong real estate and stock markets, and a growth 
boost from new technology sectors such as artificial intelligence and e -commerce. The  
pandemic has also stimulated innovation in traditional business sectors, which have 
leveraged information technology to deliver goods and services to customers at home.  
Chart 2: Merchandise trade volume optimistic and pessimistic scenarios  
(Index, 2011Q1= 100) 
9095100105110115120125130135140
2011Q1
2011Q3
2012Q1
2012Q3
2013Q1
2013Q3
2014Q1
2014Q3
2015Q1
2015Q3
2016Q1
2016Q3
2017Q1
2017Q3
2018Q1
2018Q3
2019Q1
2019Q3
2020Q1
2020Q3
2021Q1
2021Q3
Optimistic Pessimistic Baseline Trend 2011-18
 
Source:  WTO Secretariat estimates.  
Possible trajectories for trade are illustrated by Chart 2. Under the optimistic  scenario, 
second waves of COVID -19 would be better managed due to accumulated experience with 
the disease, resulting in more limited lockdowns and a smaller economic impact. 
Meanwhile, a  pessimistic  scenario might not feature a quick return to the pre -pandemic 
trend because of increased debt burdens, high unemployment, and limited early availability 
of vaccines.  
Shifts in the sectoral a nd regional composition of trade have been important during the 
pandemic and will continue to exert an influence during the recovery.  PRESS/862  
 
- 6 - 
 
  Additional trade developments  
Global merchandise trade recorded its sharpest ever one -period decline in the second quar ter, 
falling 14.3% compared to the previous period, but t he impact differed strongly  across regions  
(Chart 3). The steepest declines were in Europe and North America, where exports fell 24.5% and 
21.8%, respectively. By comparison, Asian exports were relat ively unaffected, dropping just 6.1%. 
During the same period imports were down 14.5% in North America and 19.3% in Europe but just 
7.1% in Asia.  
 
Chart 3: Merchandise exports and imports by region, 2012Q1 -2020Q2  
Volume index, 2012Q1=100  
8090100110120130140
2012Q1
2012Q3
2013Q1
2013Q3
2014Q1
2014Q3
2015Q1
2015Q3
2016Q1
2016Q3
2017Q1
2017Q3
2018Q1
2018Q3
2019Q1
2019Q3
2020Q1
2020Q3
Exports Exports Exports
Imports Imports ImportsNorth America Asia Europe
 
Source:  WTO and UNCTAD.  
The decline in services trade during the pandemic has been at least as strong as the fall in 
merchandise trade. There are no comprehensive statistics on services trade in volume terms due 
to the general unavailability of price data, but an appr oximate measure of services trade volume 
can be derived by adjusting nominal commercial services trade statistics to account for exchange 
rates and inflation. This is illustrated by Chart 4, which shows a much steeper year -on-year decline 
in global service s trade during the current recession ( -23%, peak -to-trough) than during the 
financial crisis ( -9%). The plunge was exacerbated by restrictions on international travel, which 
represents a key source of export earnings for many low -income countries.  
 PRESS/862  
 
- 7 - 
 
  Chart 4: World services trade activity index , 2007Q1 -2020Q2  
Index, 2015=100  
60708090100110120130
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
2012Q3
2013Q1
2013Q3
2014Q1
2014Q3
2015Q1
2015Q3
2016Q1
2016Q3
2017Q1
2017Q3
2018Q1
2018Q3
2019Q1
2019Q3
2020Q1
 
Source:  WTO Secretariat estimates . 
The COVID -19 pandemic has devasted trade in certain types of goods while encouraging trade in 
others. This phenomenon is illustrated by Chart 5, whic h shows quarterly year -on-year growth in 
the US$ value of world trade by broad product groups, and by Chart 6, which shows monthly year -
on-year growth in various categories of manufactured goods. In the first chart we see that trade in 
agricultural product s fell less than the world average in the second quarter ( -5% versus -21%) 
since food is a necessity that continued to be produced and shipped even under the strictest 
lockdown conditions. Meanwhile, trade in fuels and mining products fell precipitously  (-38%) as 
prices collapsed and people consumed less owing to travel restrictions. The drop in manufactured 
goods trade ( -19%) was comparable to the decline in merchandise trade overall.  
 
Chart 5: Year -on-year growth in world merchandise trade, 2019Q4 -2020Q2  
% change in US$ values  
-3%1%
-8%-1%
-6%0%
-6% -6%
-21%-5%
-38%-19%
-50%-40%-30%-20%-10%0%10%
Total
merchandiseAgricultural
productsFuels and mining
productsManufactures
Q4 2019 Q1 2020 Q2 2020
 
Source:  WTO Secretariat estimates.  PRESS/862  
 
- 8 - 
 
  Chart 6 shows that trade in most manufactured goods bottomed out in April before starting to 
recover in May and June, but that the recovery was partial and incomplete. Automotive products 
recorded the biggest decline of any category ( -70% in April), partly as a result of supply 
disruptions and partly because of a lack of demand from consumers. By June, automotive products 
trade had pi cked up to the point where it was only down 26% compared to the previous year.  As 
for the whole of the second quarter, trade in this product group was down 53%. Travel goods and 
handbags also recorded a steep decline in April since this category includes a  large proportion of 
luxury goods, consumption of which tends to rise and fall in line with business cycles.   
 
By June, trade in telecommunications equipment, which includes smart phones, had risen by 2% 
from the same period a year ago. Trade in other type s of electronics also held up during the crisis 
as households, businesses and governments upgraded computers and information technology 
infrastructure to facilitate working from home. Unsurprisingly, trade in pharmaceuticals rose during 
the pandemic as cou ntries secured essential products from foreign suppliers.   Although it is not 
shown in Chart 6, trade in personal protective equipment (PPE) recorded explosive growth, up 
92% in the second quarter and 122% in May, a dramatic example of the positive contrib ution that 
trade has made to overcoming the pandemic.  
 
Chart 6: Year -on-year growth in world manufactured goods trade by product, 2020Q2  
% change in US$ values  
-70-51-42 -42-26-21-18-14 -14-12-54613
-26-20-17-11
-19-72
-1-4
-819
512 11
-80-70-60-50-40-30-20-100102030Year -on-year growth (%)
April May June Q2
 
Source:  WTO Secretariat estimates.  
Supplementary indicators  
Given the current extraordinary an d often volatile economic conditions, we have set out to 
increasingly collect and analyse high -frequency data (i.e. statistics available at daily or weekly 
intervals). While the official data used in our models may lag for several weeks or months, 
relevant  alternative high frequency data can provide early signs of changes in activity and trade by 
reflecting economic conditions at present. This can help in predicting current and subsequent data 
at longer, e.g. quarterly, intervals and provide a useful backdr op and context against which to 
check the plausibility of model outcomes. For illustration purposes, we have selected below two 
high frequency indicators related to trade – export orders and the number of international flights - PRESS/862  
 
- 9 - 
 
  and two variables reflectin g economic activity and expectations – survey information from social 
media and copper futures.  
 
Chart 7: New export orders from purchasing managers' indices, January 2008 – July 
2020  
(Index, base=50)  
2030405060
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
Jul-20
Manufacturing Services
 
Note:  Values greater than 50 indicate expansion while  values less than 50 denote contraction.  
Source:  JPMorgan/IHS Markit.  
Chart 7 shows export orders based on purchasing managers’ indices , which  fell to record lows 
during the pandemic but have since rebounded sharply . The manufacturing index dropped to 27.1 
in April, relative to a baseline of 50, while the service index fell to 21. 8. The former was back on 
trend (49.9) at the end of August while the latter was near trend (47.1). Export orders tend to be 
a leading indicator of trade activity, but whether they retain their predictive power during the 
unusual COVID -19 pandemic remains to be seen.  
 PRESS/862  
 
- 10 - 
 
  Chart 8: International commercial flights, 1 January 2020 — 31 August  2020  
(Index, week of 1 January = 100)  
020406080100120140
International flights Intra-EU International flights excl. Intra-EU
 
Source:  OpenSky Network and WTO Secretariat Calculati ons. 
Chart  8 shows the  number of international  flights per day recorded by the OpenSky Network since 
the start of 2020. Flights worldwide fell around  80% between early January and mid -April, with 
international flights declining more than domestic ones. Total flights  have recorded a gradual 
recovery since then, rising to 57% of their level at the start of the year. The recovery has been 
stronger within the European Union, with intra-EU flights rising to 95% of the level in January. 
Cargo flights could foresh adow recovery in goods trade while passenger flights suggest 
improvement in services trade.  
 PRESS/862  
 
- 11 - 
 
  Chart 9: Illustration of phrases related to economic activity, 12 August 2019 – 
25 September 2020  
% and index  
 
Source:  The GDELT Project Summary Service.  
Chart 9 shows the daily volume and average tone of news reports containing the phrase “economic 
activity”, as monitored by the GDELT Project  Summary Service . Press reporting was already 
negative before the pandemic, bottoming out in March as the threat to the global economy 
became evident. Changes in tone since then suggest that views on the global economy were 
gradually improving, but that they have turned negative in recent days . This is a cause for concern 
and will be monitored going forward.  
 
Chart 10 shows the daily price  of futures contracts for copper , which  is a widely recognized leading 
indicator of economic activity due to the importance of this metal in many areas of manufacturing. 
Standardized contracts are traded on the COMEX exchange, a divisio n of the Chicago Mercantile 
Exchange (CME). Copper futures have risen 42% since mid-March, reflecting an overall 
improvement in economic sentiment that has taken a negative turn recently.  This is another sign 
of concern that bears watching.  
 PRESS/862  
 
- 12 - 
 
  Chart 10: COME X copper futures, 25 September  2019 — 25 September  2020  
(US$ per pound)  
1.51.71.92.12.32.52.72.93.13.33.5
25/09/2019
09/10/2019
23/10/2019
06/11/2019
20/11/2019
04/12/2019
18/12/2019
01/01/2020
15/01/2020
29/01/2020
12/02/2020
26/02/2020
11/03/2020
25/03/2020
08/04/2020
22/04/2020
06/05/2020
20/05/2020
03/06/2020
17/06/2020
01/07/2020
15/07/2020
29/07/2020
12/08/2020
26/08/2020
09/09/2020
23/09/2020
 
Source:  Chicago Mercantile Exchange (CME).  
 
END