Coronavirus: 'Drop in global trade to be worse than 2008 crisis'

The World Trade Organization (WTO) predicts a contraction of between 13% and 32% this year.

The World Trade Organization (WTO) is predicting a severe decline in international commerce this year.

In a new report the WTO forecasts a contraction of between 13% and 32% this year.

The wide range of possibilities reflects the uncertainties about the health crisis.

It says the impact on trade is likely to exceed the slump caused by the financial crisis just over a decade ago.

The more pessimistic case would amount to a decline in global trade similar to what happened in the great depression 90 years ago but in shorter period of time. 

The WTO's director general Roberto Azevedo described the figures as "ugly".

"There is no getting round that", he said. He said the situation was first and foremost a health crisis and he acknowledged that governments had to take steps to protect people's lives.

"The unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself," he added.

 

A decline of 13% in trade in goods is described in the report as a relatively optimistic scenario. It reflects a steep drop in trade followed by a recovery starting in the second half of 2020.

That of course would need to be based on substantial progress over the next few months in getting on top of the health crisis.

That is obviously not guaranteed, so the report includes a much more pessimistic case which reflects a steeper initial decline and a more prolonged and incomplete recovery.

The report also warns that "the extent of uncertainty is very high, and it is well within the realm of possibilities that for both 2020 and 2021 the outcomes could be above or below these results".

The report says that the growth in global trade had already stalled towards the end of last year. By the final quarter of 2019 goods trade was 1% lower than a year earlier.

The WTO says this was the result of "persistent trade tensions", a reference that to a large extent reflects the confrontational approach to international commerce taken by the administration of President Donald Trump.

Mr Azevedo said trade would be an important ingredient in the economic recovery after the crisis. He said keeping markets open and predictable would be critical. BBC

 
 

Other News

.
US firms create record 4.8 million jobs in June
US firms create record 4.8 million jobs in June
BUSINESSicon  03/07/2020 

The reopening of businesses has spurred job growth but a rise in Covid-19 cases may hamper recovery.

Chubb Life Vietnam honored “Best Companies to Work for in Asia 2020”
Chubb Life Vietnam honored “Best Companies to Work for in Asia 2020”
BUSINESSicon  03/07/2020 

Chubb Life Vietnam has been recognized as one of the “Best Companies to Work for in Asia 2020” by HR Asia, the continent’s leading publication for Human Resources professionals.

VN government to sell stake in country’s biggest brewery
VN government to sell stake in country’s biggest brewery
BUSINESSicon  03/07/2020 

The Government will sell its 36% stake, equivalent to 230.8 million shares worth some VND37.6 trillion (US$1.6 billion), in the Saigon Beer-Alcohol-Beverage Corporation (Sabeco), the country’s biggest brewery, this year.

Fabric production an issue for Vietnam's textile industry
Fabric production an issue for Vietnam's textile industry
BUSINESSicon  03/07/2020 

Fabric production is a challenge for Vietnam's textile and garment industry when it comes to free trade agreements (FTAs) requirements on product origin.

Vietnam's FDI inflows to increase
Vietnam's FDI inflows to increase
BUSINESSicon  03/07/2020 

A new wave of foreign direct investment driven by global uncertainty such as the US-China trade war and the COVID-19 pandemic is imminent in Vietnam, 

Predatory debt collectors hustling on borrowed time
Predatory debt collectors hustling on borrowed time
BUSINESSicon  02/07/2020 

Debt-collecting businesses are to be banned in Vietnam as part of local government action to protect customers’ rights, with the upsurge of predatory lending services triggering heated debate and eroding public trust.

Proposal steers sports betting to starting line
Proposal steers sports betting to starting line
BUSINESSicon  03/07/2020 

A proposed national steering committee is expected to help Vietnam build clearer prize-winning entertainment rules and set up closer connections between government authorities and investors 

EVFTA will broaden skies for aviation across Vietnam
EVFTA will broaden skies for aviation across Vietnam
BUSINESSicon  03/07/2020 

Never-before-seen activities in Vietnam’s aviation sphere are expected to come to EU businesses soon on the back of the landmark EU-Vietnam Free Trade Agreement.

RCEP benefits on horizon for ASEAN
RCEP benefits on horizon for ASEAN
FEATUREicon  02/07/2020 

With the Regional Comprehensive Economic Partnership scheduled to be signed this November, doors will soon open to attract more investment and swell Vietnam’s trade with international partners.

An abundance of advantages to diversify ops into Vietnam
An abundance of advantages to diversify ops into Vietnam
BUSINESSicon  02/07/2020 

Amidst the new wave of foreign investment and relocation after the pandemic, director general of the Foreign Investment Agency Do Nhat Hoang explained Vietnam’s outstanding advantages and how it can seize arising opportunities.

Vietnam closes in on tech app tax avoiders
Vietnam closes in on tech app tax avoiders
BUSINESSicon  02/07/2020 

Apple and Google are once again under fire over tax avoidance in Vietnam, with none of their revenues from their app markets being retained in the country. However, a new law could soon enable local authorities to take their cut.

Drugmakers fight to attain approval
Drugmakers fight to attain approval
BUSINESSicon  02/07/2020 

Switzerland’s drug maker Novartis Pharma Services AG has announced a GMP qualification for Lek Pharmaceuticals d.d. within the scope of certification for medicines in Vietnam,

PouYuen lays off thousands  due to Covid-19 difficulties
PouYuen lays off thousands due to Covid-19 difficulties
BUSINESSicon  02/07/2020 

More than 6,000 workers of the Taiwanese company, PouYuen, in HCM City have been laid off due to the company's business difficulties during the Covid-19 pandemic.

Fitch Solutions revises up Viet Nam’s 2020 GDP growth
Fitch Solutions revises up Viet Nam’s 2020 GDP growth
BUSINESSicon  02/07/2020 

Fitch Solutions have revised up its 2020 real GDP growth forecast for Viet Nam slightly to 3.0 per cent, from 2.8 per cent previously.

Domestic demand the driving force for agriculture to develop
Domestic demand the driving force for agriculture to develop
BUSINESSicon  03/07/2020 

Nguyen Quoc Toan, director-general of the General Department for Agricultural Products Processing and Market Development, under the Ministry of Agriculture and Rural Development, 

Zalo Bank not licensed by SBV and MoIT
Zalo Bank not licensed by SBV and MoIT
BUSINESSicon  02/07/2020 

The State Bank of Vietnam (SBV) and the Ministry of Industry and Trade have affirmed that they have not licensed Zalo Bank to provide online built-in financial services.

EVFTA to come into effect in a month
EVFTA to come into effect in a month
BUSINESSicon  02/07/2020 

The EVFTA will abolish 65 per cent of the duties on EU exports to its developing partner, with the remainder phased out over a 10-year period.

Footwear sector to improve supply chain to take advantage of EVFTA
Footwear sector to improve supply chain to take advantage of EVFTA
BUSINESSicon  02/07/2020 

Vietnam’s leather and footwear industry should improve its supply chain performance to take advantage of the milestone trade deal that Vietnam has signed with the EU and to recover from the effects of the COVID-19 crisis, 

World Bank Vietnam has new head
World Bank Vietnam has new head
BUSINESSicon  02/07/2020 

From July 1, Ms. Carolyn Turk will work at the World Bank (WB) Hanoi office as its country director in Vietnam, according to the office.

China maintains position as Vietnam's largest import market
China maintains position as Vietnam's largest import market
VIDEOicon  02/07/2020 

Despite the first half of the year seeing Vietnamese export turnover to China only reaching a mere US$34.8 billion, China retained its place as the country’s largest import market, according to the General Statistics Office.

 
 
 
Leave your comment on an article

OR QUICK LOGIN