The Strategist

WTO: Global exports fall by 21% in Q2

09/24/2020 - 03:08

World exports in the second quarter of this year experienced an unprecedented decline: in monetary terms, the total volume of trade in annual terms dropped by 21% at once, in physical terms (excluding the decline in energy prices and a number of other factors) - by 14.3%. Experts note that in the summer, world trade was actively recovering, but now leading indicators of the state of business activity indicate a slowdown in the pace of this growth.

The physical volume of world trade in the second quarter contracted more than expected - by 14.3% compared to the first three months of the year, the World Trade Organization reported yesterday (WTO, estimates are adjusted for seasonality). This decline is due to tough restrictions imposed by countries to combat the coronavirus pandemic. For comparison, during the global financial crisis between the third quarter of 2008 and the first quarter of 2009, the depth of the recession was less - 10.2%.

Exports fell the most in North America - by 24.5%, while imports - by 14.5% (in the first quarter there was a decrease of 1.5% and 2.2%). In Asia, supplies abroad fell by 6.1%, while imports fell by 7.1% (minus 1.7% and minus 0.7%, respectively). In South America, exports in April-June contracted by 5.3% (minus 1.6%), while imports - by 13.7% (minus 1.1%). In Europe, the decline was more pronounced - for exports by 21.8% (in the first quarter - by 4.3%), for imports - by 19.3% (by 2.9%).

The drop in trade volumes is partly explained by a significant drop in energy prices (minus 35.1%, in the first quarter - minus 18.5%). At the same time, the decline in other raw materials was much less pronounced - by 4.1% (in January-March, an increase of 0.4%). Manufacturers’ prices fell even less - by 1.2%.

Considering the volume of trade in monetary terms, the WTO calculated that the total value of world exports in annual terms in the second quarter of 2020 decreased significantly - by 21%, to $ 3.7 trillion (while the volume of world imports from for distortions in statistics amounted to $ 3.8 trillion). The decrease was especially noticeable in the countries of North America, where the decline was 32%, and Europe, where exports fell by 23%. In the crisis second quarter of 2009, however, the decline in value terms was stronger - 33%.

The third quarter of this year, according to experts, should show a more positive dynamics of trade, however, the pace of recovery is slowing down as the effect of the lifting of restrictions is exhausted.