WTO: 'Deepest recession of our lifetimes,' ahead after drop in global trade due to COVID-19
The World Trade Organization has forecast that global trade growth will drop by up to a third in 2020 due to the COVID-19 pandemic.
It bleakly added that goods trade would shrink more steeply this year than in the 2008 Global Financial Crisis, with WTO director-general Roberto Azevedo warning that the downturn "may well be the deepest economic recession or downturn of our lifetimes."
"These numbers are ugly – there is no getting around that," Azevedo added.
In a statement on Wednesday, the WTO said world trade is expected to fall by "between 13 percent and 32 percent in 2020 as the COVID-19 pandemic disrupts normal economic activity and life around the world."
It added that the range of the expected fall is wide as there are many possibilities for how trade would be hit by the "unprecedented" health crisis and the economic impact was uncertain.
"Restrictions on movement and social distancing to slow the spread of the disease mean that labor supply, transport and travel are today directly affected in ways they were not during the financial crisis," it said.
"Whole sectors of national economies have been shut down, including hotels, restaurants, non-essential retail trade, tourism and significant shares of manufacturing," it added.
Although an optimistic outlook is that a sharp drop in trade will be followed by a recovery starting in the second half of 2020, the more pessimistic view is that the initial decline will be steeper and the recovery will be "prolonged and incomplete," the WTO said.
"Under both scenarios, all regions will suffer double-digit declines in exports and imports in 2020," it said, adding that North America and Asia would be hardest hit.
In its main annual forecast, the Geneva-based WTO highlighted that trade had already been slowing in 2019, before the emergence of the novel coronavirus in China at the end of last year.
Trade tensions, uncertainty and an economic slowdown weighed heavily on goods trade, which declined by 0.1 percent in 2019 after rising 2.9 percent a year earlier.
The WTO had previously forecast that there would be a trade growth in 2020. However, the situation has taken a dramatic turn since the COVID-19 outbreak.
The virus has now infected more than 1.4 million people since late last year, killing more than 80,000 and forcing governments across the world to take radical measures.
More than half of the world's population have been asked to stay at home and economic activity in many places has ground to a virtual halt.
Nearly all regions around the world are expected to register "double-digit declines in trade volumes" this year, the WTO said.
"The unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself," the WTO's Azevedo added.