Pandemic could cause deepest economic recession 'of our lifetimes': WTO chief

WTO Says Global Trade Collapse May Be Worst in a Generation

WTO Says Global Trade Collapse May Be Worst in a Generation

The World Trade Organization (WTO) on Wednesday forecast that goods trade would shrink more steeply this year than during the global financial crisis a decade ago, and then rebound in 2021, as the COVID-19 pandemic recedes - provided countries work together.

On the bright side, the WTO chief also said that economic recovery could be quite fast "regardless of how steep the initial fall is" - but only if right policies are in place.The pandemic already took a bite out of some of the world's leading economies.

"These numbers are ugly - there is no getting around that", said WTO Director-General Roberto Azevêdo.

The WTO acknowledged that there was huge uncertainty around how the economic crisis around the pandemic, which has infected more than 1.4 million people globally and killed almost 83,000, would unfold.

"This crisis is first and foremost a health crisis, which has forced governments to take unprecedented measures to protect people's lives", Azevêdo said.

"If the pandemic is brought under control and trade starts to expand again, most regions could record double-digit rebounds in 2021 of around 21% in the optimistic scenario and 24% in the pessimistic scenario - albeit from a much lower base". It displays a steep drop in trade adopted by a restoration beginning in the second half of 2020.

Mr Azevedo said trade would be an important ingredient in the economic recovery after the crisis.

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In its outlook, the WTO said it expected a recovery in trade next year but that it was hard to say how vigorous the bounceback would be. "There is no way around that".

Regarding global trade in goods past year, the value fell by 3 percent to $18.88 trillion, with the world's top exporter, China, registering no growth at $2.49 trillion, followed by the USA with a 1 percent contraction to $1.64 trillion and Germany with a 5 percent fall to $1.48 trillion.

The dollar value of world merchandise exports fell by three percent to $18.89 trillion, the WTO said.

However, the situation has taken a dramatic turn since COVID-19 first emerged in China late previous year.

"Comparisons with the financial crisis of 2008 and even the Great Depression of the 1930s are inevitable".

"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.

Developments remained very uncertain, but WTO said countries could ensure a faster and stronger rebound through worldwide cooperation. He stated retaining markets open and predictable would be essential.

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