In April 2020, the World Trade Organization (WTO) published its latest trade forecast. It predicted that global trade in goods will drop by between 13 per cent and 32 per cent in 2020 as a result of the economic impact of the pandemic. Fortunately, global trade is expected to bounce back in 2021, but the nature of the recovery is not yet clear. Rather than attempting to give an exact number, WTO forecasters have wisely considered both pessimistic and optimistic scenarios.
The WTO’s forecasts are illustrated in Figure 1. It shows the growth of global trade from 2000 to the financial crisis of 2008/9, the resulting dip in global trade, and the subsequent recovery and growth from 2011 to 2019. It then shows a stalling of growth in trade in 2019, just before the current pandemic induced slowdown, after which the graph projects both pessimistic and optimistic scenarios up to 2022.
Figure 1: Global merchandise trade volumes, 2000-2022
Source: WTO (100 = global trade volumes in 2015).
Figure 1 clearly shows that the growth in trade (blue line) was dented by the financial crisis of 2008-09. While the growth in trade volume recovered, it did not return to the growth trajectory before the crisis (dotted grey line).