Global Trade Update (October 2020)
Global trade recorded a 5% drop in the third quarter of 2020 compared to the same period the previous year, according UNCTAD’s new Global Trade Update published on 20 October.
The organization’s preliminary forecast of a 3% year-on-year decline for the fourth quarter shows that the recovery could continue but that it would be too weak to pull trade out of the red for 2020.
Depending on how the COVID-19 pandemic evolves in the winter months, UNCTAD expects the value of global trade to finish the year 7% to 9% below the level of 2019.
The report highlights that China has led the recovery. The country’s exports, after falling in the early months of the pandemic, stabilized in the second quarter of 2020 and rebounded strongly in the third quarter, with year-over-year growth rates of almost 10%. Chinese imports stabilized in July and August and grew by 13% in September.
Other key trade trends include the following:
- Exports from developing countries have fared better than those of developed nations. Year-on-year growth of developing economies’ exports improved from -18% in Q2 to -6% in July, while those from developed nations increased from -22% to -14%.
- 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% and exports by 41%. As of July, the fall in trade remains significant in most regions except for East Asia.
- The value of international trade in the energy and automotive sectors remains substantially below its levels of 2019. Meanhwile, increases in demand for home office equipment and personal protective gear has resulted in strong growth rates for trade in the sectors of communication equipment, office machineries, and textiles and apparel.
The report gives special attention to COVID-19 medical supplies (personal protective equipment, disinfectants, diagnostic kits, oxygen respirators and other related hospital equipment).
- Trade in COVID-19 medical supplies (personal protective equipment, disinfectants, diagnostic kits, oxygen respirators and other related hospital equipment) has grown by an average of more than 50% since April 2020, but the increase in such trade has primarily benefited residents of wealthier nations.
- Since the outset of the pandemic, each resident of high-income countries has benefited on average from an additional $10 per month of imports of COVID-19 related products, compared with just $1 for people living in middle-income countries and a mere $0.10 for those in low-income countries.
The Global Trade Update is issued quarterly by UNCTAD and presents trends and short-term forecasts for world trade.