Trade in many developing countries is expected to take a “nosedive” in the second quarter of 2020, owing to the unprecedented effects of the coronavirus pandemic, UN economists said on Tuesday.
Worrying as that is, commerce is expected to plummet further – by a staggering 27 per cent – from April to the end of June.
To put it into perspective, this is even worse than the near 25 per cent contraction in world trade in the aftermath of the 2008-9 financial crisis, from which the global economy has yet to recover fully.
COVID-19 has severely hit markets in developing and developed countries alike, continuing the bad run observed in the first quarter, UNCTAD said.
South Asia, Middle East, worst hit, some ‘signs of recovery’
Impact of COVID-19 on imports and exports of major trading economies, January-May 2020.
Impact of COVID-19 on imports and exports of major trading economies, January-May 2020. | UNCTAD
But trade data shows that in April, the steepest decline in exports was in poorer countries in South Asia and the Middle East.
On the other hand, East Asian and Pacific nations experienced the smallest export shock – and some have even shown “signs of recovery”, according to UNCTAD’s Global Trade Update.
Purchasing Manager Indices (PMI), UNCTAD noted that they “signal further deterioration of international trade in the second quarter”.
PMI above 50, indicates an expansion of the export orders compared to the previous month, while anything below 50 represents a contraction; 50 indicates no change.
By way of example, it cited poor export orders in China (33.5 in April, 35.8 in May) the U.S (35.3 in April, 39.5 in May) and Europe (13.6 in April – an all-time low – and 31.9 in May.
