World trade should contract between 13% and 32% in 2020, greater than that caused by the financial crisis of 2008, under the effect of the pandemic of the new coronavirus which has significantly slowed exchange rates, estimated on Wednesday the WTO .
The most serious recession of our existence
Millions of people around the world have already lost their jobs and their income, said the director general of the World Trade Organization (WTO), Roberto Azevedo, during a virtual press conference from Geneva.
Faced with what could be the most serious recession or the most serious economic downturn in our existence, we must use all the potential drivers of sustainable growth to reverse the situation, he added.
Already hampered by trade tensions and uncertainties around Brexit, trade is expected to drop double digits in almost all regions of the world, according to the WTO.
The correction threatens to be particularly severe for North America and Asia, whose exports could collapse by more than 40% and 36% respectively, by accepting the most pessimistic assumption of the economists of the organization .
Europe and South America would also see declines of more than 30%. Governments around the world can and should lay the foundation for an inclusive and energetic recovery (…) If countries work together, we will see faster and stronger recovery than if each country acts alone, Roberto Azevedo warned .
Whole closed areas
All in all, the global exchange crisis will probably be greater than the contraction in trade caused by the global financial crisis of 2008-2009, warns the WTO.
While the two episodes are similar in certain ways, particularly in that governments intervene massively to support businesses and households, they differ by the very nature of the pandemic and the measures put in place to contain it.
Due to travel restrictions and social distancing imposed to slow the spread of the disease, the supply of labor, transportation and travel are now directly affected, said the WTO. Entire sectors of the national economy have been closed, such as hotels, restaurants, non-essential retail trade, tourism and a significant part of manufacturing activity, she added.
A revival is possible
The two superpowers of the plant, China, the cradle of the pandemic, and the United States, its new picentre, inject and will inject hundreds, even thousands, of billions of dollars and yuan in their savings to limit the extent of depression, with incalculable social repercussions: business failures, indebtedness, unemployment.
The main drivers of the European economy are also affected: in Germany, the economy could contract by almost 10% in the second quarter, unheard of in recent history, while France is expected to experience a recession of a magnitude noted after the fall in GDP of around 6% in the first quarter, its worst quarterly performance since the end of the Second World War.
The inevitable decline in trade and production will have painful consequences for households and businesses, in addition to the human suffering caused by the disease itself, warned Roberto Azevedo.
No less than 1.25 billion workers are in particular at risk of being directly affected by the crisis across the world, where more than 4 billion people, or more than half of humanity, are forced or encouraged by their authorities to stay at home. they, according to the International Labor Organization (ILO).
A temporary and punctual shock
The figures are bad, it is undeniable. But a rapid and vigorous recovery is possible. The decisions made today will determine the shape of the recovery and the prospects for global growth. We must lay the foundations for a strong, sustained and socially inclusive recovery, noted Roberto Azevedo.
In the optimistic scenario of the WTO, that is, a contraction of around 13% in exchange rates in 2020, the volume of world trade should rebound by more than 21% in 2021. In its most pessimistic scenario, retaining a contraction greater than 30% , the rebound would be even more spectacular, likely to reach 24%, and up to 36% in Asia.
These estimates are surrounded by a great degree of uncertainty, recognizes the WTO, depending on the duration of the pandemic and the measures put in place to combat it. The probability of a strong recovery is greater if businesses and consumers see the pandemic as a temporary and one-off shock, notes the WTO.
(nxp / afp)
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