Outlook for 2021 to depend upon evolution of virus, dissemination of
vaccines, points out Goods Trade Barometer
The decline in the volume of world trade in goods in 2020 may be “slightly
less severe” than the WTO’s recent forecast of 9.2 per cent due to strong
performance of trade in the fourth quarter, according to the latest Goods
Trade Barometer brought out by the multilateral body.
But prospects for 2021 and beyond are uncertain as new variants of Covid19 have appeared.
“The outlook for merchandise trade will depend to a large extent on the
evolution of the virus and the dissemination of effective vaccines,” pointed
out the report of the quarterly Goods Trade Barometer released by the WTO
on Thursday.
World trade in goods remained strong in the fourth quarter of 2020
maintaining the third quarter’s recovery. “The barometer’s current reading
of 103.9 is above both the baseline value of 100 for the index and the
previous reading of 100.7 from last November, signalling a marked
improvement in merchandise trade since it dropped sharply in the first half
of last year”, the report pointed out.
While all component indices are either above trend or on-trend, some, like
export orders and auto products, already show signs of deceleration while
others could turn down in the near future, it said.
“Furthermore, the indicator may not fully reflect the resurgence of Covid-19
and the appearance of new variants of the disease, which will undoubtedly
weigh on goods trade in the first quarter of 2021,” the report added.
The Goods Trade Barometer provides real-time information on the
trajectory of world merchandise trade relative to recent trends.
Strong growth in exports from Asia to North America and Europe had
revived world merchandise trade in the third quarter of 2020 from a sharp
decline in the second quarter, although trade in the period was still down
5.6 per cent compared to the third quarter of 2019. While still very large,
these declines are less severe than many analysts feared at the start of the
pandemic, the report said, adding that the actual decrease in world trade
volume in 2020 may be less severe than 9.2 per cent predicted earlier.
The container shipping and air freight indices are both rising, suggesting
faster than average growth, although recent high-frequency data show that
container shipping has dipped in the new year. The report said that indices
for electronic components and raw materials are above trend and rising,
possibly due to inventory stockpiling. “Overall, this suggests that trade’s
upward momentum may have peaked,” it observed.
Source: The Hindu Business Line, India Saturday, 20 February 2021