GENEVA (AP) — The World Trade Organization is predicting a 9.2% drop in merchandise trade this year, saying the hit from the pandemic doesn’t appear to be bad as first thought - though the recovery may be slower than anticipated and could worsen if case counts rise again.
Economists from the Geneva-based trade body on Tuesday revised their earlier prediction of a 12.9% plunge in merchandise trade this year. That forecast was presented in April, when COVID-19 case counts were soaring in major economic engines like the Europe Union and the United States.
The revision follows improved trade performances in June and July, notably thanks to rising demand for health care goods and electronic equipment.
But likewise, WTO forecasters now predict a 7.2% rise in trade next year, far more “pessimistic” than the April forecast for a 21.3% bounce back. The forecasts exclude trade in services, and focus only on merchandise.
The WTO cautioned that any recovery over the medium term will depend on the strength of investment and employment.
“Both could be undermined if confidence is dented by new outbreaks of COVID-19, which might force governments to impose additional lockdowns,” WTO said in a statement.