World trade recovers in Q3, but still negative
Despite signs of recovery during the third quarter of this year, the United Nations Conference on Trade and Development (UNCTAD) forecasts a 7-9% fall in the value of world trade in 2020 compared to the previous year.
According to data from its latest study, which includes trends and short-term forecasts for world trade, trade activity will fall by about 5% in the third quarter of this year, improving on the 19% year-on-year decline in the second quarter, but still showing "insufficient" results to leave the numbers in the red.
The study's initial projections put year-on-year growth for Q4 at -3%; however, UNCTAD warns of the "uncertainties" in this figure due to the evolution of the coronavirus pandemic and its effect on the economy.
The report also highlights a remarkable trade recovery by the Asian giant. After the falls it experienced during the first months of the pandemic, exports stabilised during the second quarter of 2020 and rebounded strongly during the third quarter with growth rates of almost 10% compared to last year.
Examination of Chinese imports indicates that they managed to stabilise in July and August and grew by 13% in September, unlike other major economies.
Developing country exports performed better than those of developed nations. Year-on-year growth of the former improved from -18% in the second quarter to -6% in July, while those of the latter increased from -22% to -14%.
The fall in international trade during the second quarter affected all regions, with the sharpest decline occurring in Western and Southern Asia, where imports fell by 35% and exports by 41%. Since July, the fall in trade remains significant in most regions with the exception of East Asia.
The volume of international trade in the energy and automotive sectors remains substantially below 2019 levels. However, increased demand for home office equipment and personal protective equipment generated high rates of trade growth in the communications, office equipment, textile and clothing sectors.
The study also devotes a section to medical supplies related to COVID-19 such as personal protective equipment, disinfection products, diagnostic tests, respirators and other materials related to the disease.
Since last April, trade in medical supplies has grown by an average of more than 50%, benefiting mainly citizens of the richer nations.
Since the beginning of the pandemic, each resident of high-income countries has made an average of an additional ten dollars per month from imports of VOC-19-related products, compared to only one dollar for people living in middle-income countries and just ten cents for people in low-income nations.
