The United Nations Conference on Trade and Development (UNCTAD) has estimated that world trade would be about five per cent less in Q3’20 than during the same period in 2019 – an improvement from the 19 per cent year-on-year decline recorded in Q2’20 but still insufficient to pull trade out of the red. In its quarterly Global Trade Update report released at the weekend, the UN trade and development body said its preliminary forecasts put year-on-year growth for Q4 2020 at three per cent less, but added that this figure is still uncertain due to concerns about how the Covid-19 crisis will evolve and affect economic activity in the coming months.
The report highlights China’s notable trade recovery. The country’s exports, after falling in the early months of the pandemic, stabilized in Q2’20 and rebounded strongly in Q3, with year-over-year growth rates of almost 10 per cent. Contrary to other major economies, Chinese imports stabilized in July and August and grew by 13 per cent in September.
It also shows that exports from developing countries have fared better than those of developed nations as year-on-year growth of developing economies’ exports improved from -18 per cent in Q2 to -6 per cent in July, while those from developed nations increased from -22 per cent to -14 per cent. No region was spared from the fall in international trade in the second quarter of 2020, but the sharpest decline was for the West and South Asia regions, where imports dropped by 35 per cent and exports by 41 per cent.
As of July, the fall in trade remains significant in most regions except for East Asia, the report said. According to the report, while the value of international trade in the energy and automotive sectors remains substantially below its levels of 2019, increases in demand for home office equipment and personal protective gear have resulted in strong growth rates for trade in the sectors of communication equipment, office machineries, and textiles and apparel.