The WTO also predicted a 7.2% increase in trade next year, much more “pessimistic” than the April forecast of a 21.3% rebound. The forecasts exclude trade in services and focus only on goods. (JOERN POLLEX)
GENEVA (AP) – The World Trade Organization on Tuesday forecast a 9.2% drop in merchandise trade this year, saying the impact of the pandemic does not appear to be as bad as initially thought , although the recovery may be slower than anticipated and could get worse if case counts rise again.
Economists at the Geneva-based trade body today revised their previous prediction, when they forecast a 12.9% drop . That forecast came in April, when COVID-19 cases skyrocketed in major economic engines like the European Union and the United States.
The revision follows improving business results in June and July, largely driven by growing demand for healthcare products and electronic equipment.
But likewise, the WTO now predicts a 7.2% increase in trade next year, much more “pessimistic” than April's forecast of a 21.3% rebound. The forecasts exclude trade in services and focus only on goods.
The WTO warned that any recovery in the medium term will depend on the strength of investment and employment.
“Both could be undermined if confidence is affected by new COVID-19 outbreaks, which could force governments to impose additional blockades,” the WTO said in a statement.