- The WTO’s quarterly merchandise trade barometer rose to 100.7 in the third quarter
- The WTO said that despite the strong performance, the epidemic continues to bring uncertainty to the global trading system.
- OECD Secretary-General Gurria urged governments to strengthen coordination to deal with the crisis.
According to a report released on Friday, the World Trade Organization (WTO) said that the strong rebound in global trade during the third quarter may slow down in the last few months of this year as countries struggle to fight the resurgence of the new coronavirus epidemic.
The WTO’s quarterly merchandise trade barometer rose to 100.7 in the third quarter, a significant improvement from the 84.5 announced in August.
The index at 100 indicates that growth in the next quarter is in line with the mid-term trend.
“This outcome would require a sharp rebound in the third quarter following the 17.2% year-on-year decline registered in the second quarter,” according to the report.
The WTO said that despite the strong performance, the epidemic continues to bring uncertainty to the global trading system.
As pent-up demand is exhausted, and inventory replenishment is completed, the flow of goods may slow down in the fourth quarter.
The latest report of the WTO is consistent with its revised trade forecast in October, which predicts that global merchandise trade will fall by 9.2% in 2020.
“The latest reading indicates a strong rebound in trade in the third quarter as lockdowns were eased, but growth is likely to slow in the fourth quarter as pent-up demand is exhausted and inventory restocking is completed,” the WTO said.
The WTO pointed out that there are several promising new coronavirus vaccines in development, but it is too early to determine when these vaccines will be distributed. Certain vaccines include those produced by BioNTech SE and Moderna Inc.
The developed vaccine may receive conditional approval from the United States and the European Union in the next few weeks.
OECD Secretary-General: Global Economy at a Critical Moment
The Secretary-General of the Organization for Economic Cooperation and Development (OECD) Angel Gurria, urged governments to strengthen coordination to deal with the crisis.
This weekend, the leaders of the G20 will hold a summit. Worries about the global economic recovery are heating up.
Gurria warned that in the face of increasing costs, and the government’s affordability is approaching its limit, the global economy in the epidemic may face a critical moment.
“It tends to be more effective when there is a fire to fight, like the one now,” Gurria said. “My biggest concern is that the awareness of the need for further coordination and cooperation may not be as obvious, and my greatest hope is that it will be.”
Gurria has served as the Secretary-General of the Paris-based OECD for 14 years. He said that although governments of various countries opened the floodgates to increase spending this year, this is the correct way to deal with the worst economic recession in modern history, but fiscal firepower of many countries is about to run out.
“The big difference with today’s situation is that you don’t have a known cost, you do not have a finite number,” said Gurria, an economist and former Mexican finance minister.
His comments sounded the alarm for the leaders of the Group of Twenty (G-20) who will meet on Saturday; the outside world is worried that the recovery of the global economy may be off track.
“The question is, how many countries can actually do that and keep debt within a reasonable limit,” he said. “The answer is, not many.”