Latest WTO Goods Trade Barometer reveals the volume of world merchandise trade is likely to fall precipitously in the first half of 2020 as the COVID-19 pandemic disrupts the global economy. The index currently stands at 87.6, far below the baseline value of 100.
The current reading on the barometer captures the initial phases of the COVID-19 outbreak, and shows no sign of the trade decline bottoming out yet. All of the barometer's components indices are currently well below trend. The automotive products index is weakest of all, due to collapsing car production and sales in major economies. The sharp decline in the forward-looking export orders index suggests that trade weakness will persist in the short-run. Similarly, declines in the container shipping and air freight indices reflect weak demand for traded goods as well as supply-side constraints arising from efforts to suppress COVID-show signs of stability, although they too remain below trend.
Trade had already been slowing in 2019 before the pandemic, weighed down by persistent trade tensions and weakening economic growth. WTO trade statistics show that the volume of world merchandise trade shrank by 0.1 per cent in 2019, marking the first annual decline since 2009, during the global financial crisis.