Global Trade Rebound May Be Brief Amid New Virus Wave, WTO Says
The World Trade Organization said the strong rebound in global trade during the third quarter may slow in the closing months of the year as nations battle a resurgence of the Covid-19 virus, according to a report issued Friday.
The Geneva-based trade body’s quarterly goods trade barometer rose to 100.7 last quarter, a dramatic improvement from a reading of 84.5 released in August. A level of 100 indicates growth over the next quarter that’s in line with medium-term trends.
Despite the stronger performance, the virus continues to create uncertainty on the global trading system, and the movement of goods is likely to slow in the fourth quarter as pent-up demand is exhausted and inventory restocking is completed, the WTO said.
A new wave of the virus is spreading, particularly in the U.S. and across Europe’s big economies. The latest spikes in infections are prompting some governments to impose mask mandates, curfews and other restrictions like lockdowns that are both boosting international e-commerce and straining the capacity of supply chains.
The WTO’s latest report is consistent with its October revised trade forecast, which predicted a 9.2% decline in the volume of world merchandise trade in 2020. “This outcome would require a sharp rebound in the third quarter following the 17.2% year-on-year decline registered in the second quarter,” according to the report.
The WTO noted that there are several promising Covid-19 vaccines in development, but it’s too soon to say when they will be distributed. It’s possible that certain vaccines -- including those produced by BioNTech SE and Moderna Inc. -- may receive conditional approval in the U.S. and European Union in the coming weeks.
©2020 Bloomberg L.P.