WTO projects 18.5% drop in world trade in q2

World trade will record an all-time decline of 18.5% in the second quarter of the year due to the pandemic of the new coronavirus, but the fall in the year will be less severe than expected thanks to the "rapid reaction of governments", announced the World Trade Organization (WTO) on Tuesday (23).
"The collapse of the trade we are currently seeing is at historic levels. In fact, it is the most pronounced of which we are aware," said The Director General of the WTO, Brazilian Roberto Azevêdo, quoted in a statement.
"But there is an important positive aspect to this phenomenon, that it could have been much worse (...) but we cannot afford to fall into complacency," he added.
The WTO continues to project a tumble in global trade in 2020, but now assesses it as "unlikely" that the drop will reach the worst-case scenario projected in April, when it estimated a decline of up to 32%, and at least 13%, in the best case scenario.
"In the current situation, trade would only need to grow 2.5% per quarter for the remainder of the year to meet the optimistic projection," he said.
According to WTO statistics, the volume of trade in goods fell at a 3% annual pace in the first quarter.
Initial estimates for the second quarter, during which the virus and related containment measures affected much of the world's population, indicate a reduction in annual pace of 18.5%.
According to Azevêdo, political decisions were "decisive in cushioning the impact of production and trade, and these decisions will continue to be important in determining the pace of economic recovery."
"In order for production and trade to recover strongly in 2021, fiscal, monetary and trade policies must keep the joint stimulus in the same direction," he warned.
The WTO projects a 2.5% drop in global GDP in 2020, which could reach a decline of 8.8% in the worst case scenario.