According to the World Trade Organization (WTO), the disruptions caused by the coronavirus epidemic in China has led to weak trade. The movement of international commerce has already been slowed by tariffs and uncertainty in light of this virus’ impact.
The latest measurement of the Goods Trade Barometer, posted by the WTO, stood at 95.5, compared to its reading of 96.6 in November. For reference, readings of 100 indicate growth in line with trends, while those higher or lower than 100 points to growth above or below the trend.
“The slow start could be dampened further by global health threats and other recent developments in the first few months of the year, which are not yet accounted for in the barometer’s best-available historical data,” the WTO said.
The WTO claims that this barometer does not indicate a sustained recovery – especially because, in the third quarter last year, world merchandise trade was down 0.2%.
“Year-on-year trade growth may fall again in the first quarter of 2020, though official statistics to confirm this will only become available in June,” the WTO said.
Declines in container shipping and agricultural commodities have been tied to the recent drop. Other impacts have been linked to air freight and electronic components. While considered below the baseline, these drops appear to have stabilized and can be expected to rise.
“However, every component of the Goods Trade Barometer will be influenced by the economic impact of Covid-19 and the effectiveness of efforts to treat and contain the disease,” the report said.
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World merchandise trade is set to plummet by between 13 and 32% in 2020. How will this affect the economy?