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World trade could contract between 13% and 32% in 2020, much more than in the 2008 financial crisis, due to the “deepest recession of our existence“Derived from the pandemic of the new coronavirus, estimated on Wednesday the World Trade Organization (WTO).
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“Millions of people worldwide have already lost their jobs and incomes”Warned the WTO director-general, Roberto Azevedo, during a virtual press conference from Geneva.
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“In the face of what could be the deepest recession or the most serious economic setback in our existence, we must use all the potential engines of lasting growth to reverse the situation,” he added.
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Already shaken by trade tensions between China and the United States and uncertainty surrounding Brexit, trade will suffer a “double digit” drop in “almost all regions” of the planet, according to the institution.
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Correction threatens to be especially severe in North America and Asia, whose exports could plummet more than 40% and 36% respectively, sticking to the most pessimistic hypothesis of the organization’s economists.
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Latin America and Europe would also suffer falls of over 30%.
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“Governments around the world can and should lay the foundations for an energetic and inclusive recovery(…). If the countries collaborate, we will see a much faster recovery than if each one acts on their own ”, Roberto Azevedo warned.
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The trade crisis will “probably” be greater than the trade contraction caused by the 2008-2009 global financial crisis, “warns the WTO.
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Although both episodes are “similar in certain respects”, particularly in the massive intervention of governments to support businesses and households, they differ due to the nature of the pandemic and the measures implemented to contain it.
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“Because of the restrictions that affect movement and social distance, both imposed to stop the spread of the disease, labor supply, transport and travel are directly affected“Stresses the WTO.
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“Entire sectors of national economies have closed, such as hospitality, catering, non-essential retail, tourism, and a significant portion of manufacturing activity“, Add.
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Recovery possible
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The two superpowers on the planet, China -crowd of the pandemic- and U.S – its new epicenter – they inject and will inject billions of dollars and yuan into their economies to limit the scope of the depression with unforeseeable social repercussions: bankruptcy of companies, debt, unemployment.
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The main engines of the European economy are also suffering: in Germany, the economy will contract almost 10% in the second semester, for the first time in recent history, and in France There will be a recession with a GDP drop of around 6% in the first half, the worst quarterly result since the end of World War II.
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“The inevitable decline in trade and production will have painful consequences for households and businesses, apart from the human suffering caused by the disease itself ”Azevedo stressed.
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Not less than 1,250 million workers will be directly affected due to the crisis throughout the planet, where more than 4,000 million people – half of humanity – must remain at home at the request of the authorities, according to the International Labor Organization (ILO).
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“The numbers are ugly, there is no denying it. With everything, a quick and vigorous recovery is possible. The decisions made today will determine the future shape of the global growth and recovery prospects. We must lay the foundations for a strong, sustained and socially inclusive recovery ”, estimated Roberto Azevedo.
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In the optimistic projection of the WTO, that is, a contraction of trade of around 13% in 2020, the volume of world trade would increase more than 21% in 2021. In its most pessimistic projection, which retains a concentration of over 30%, the rebound would be even greater, likely to reach 24% and up to 36% in Asia.
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However, these estimates are surrounded by great uncertainty, the WTO acknowledges, depending on the duration of the pandemic and the measures taken to combat it.
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“The probability of a strong recovery is greater if companies and consumers consider the pandemic as a temporary and punctual impact,” says the WTO.
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