The international trade in goods is expected to nosedive by 20% this year after a 5% drop year-on-year in the first-quarter and what could be a 27% plunge in the second-quarter, says the United Nations Conference on Trade and Development (UNCTAD).
UNCTAD’s forecast is in line with the World Trade Organization’s (WTO) expectation that the decline in international trade this year will be between 13 and 32%.
“International trade is likely to remain below the levels observed in 2019,” said UNCTAD director of international trade Pamela Coke-Hamilton in a statement on Thursday (June 11). “But how far depends on the pandemic’s evolution and the type and extent of the policies governments adopt as they try to restart their economies.”
Among the world’s biggest economies, China’s first-quarter exports shrank by 14% but saw an uptick of 3% in April.
Exports out of the United States dropped by 3% in the first three months of 2020 and plunged 29% in April.
UNCTAD said preliminary data for April suggests the sharpest downturn for South Asia and the Middle East, which could register trade falls of up to 40%.
East Asia and the Pacific regions appear to have fared the best, with trade drops remaining in the single digits both in the first-quarter as well as in April.
“For developing countries, while declines in exports are likely driven by reduced demand in destination markets, declines in imports may indicate not only reduced demand but also exchange rate movements, concerns regarding debt and a shortage of foreign currency,” said UNCTAD.
ISLAMIC ECONOMIES TRADE Q1
Among the selected economies highlighted in UNCTAD’s Global Trade Update June 2020 report, Islamic economies Saudi Arabia and Oman saw exports contract in the first quarter, by 9% for the former and 13% for the latter.
Other Muslim-majority countries on the selected economies list were in the black for exports in the first-quarter: Bangladesh (15%), Egypt (0%), Indonesia (4%), Malaysia (2%), Nigeria (4%), Pakistan (2%), Turkey (2%).
ISLAMIC ECONOMIES APRIL TRADE
Trade deteriorated in April when only two out of UNCTAD’s 32-country list enjoyed positive export growth: China (3%) and Thailand (2%).
Among Islamic economies, Saudi Arabia, Pakistan and Nigeria were the hardest hit. The Gulf Cooperation Council country took a 49% year-on-year contraction to exports, Pakistan saw its goods sales out of the country plunge by 47%, and Africa’s largest economy’s exports nosedived by 40%.
Turkey’s exports declined by 38%, Oman by 25%, Malaysia by 24%, Egypt by 19%, Bangladesh by 13% and Indonesia by 7%.
Only office machinery enjoyed growth in April, at 8%.
Global trade in the agri-food sector contracted by 2% in April after a 2% first-quarter growth.
Automotive and Energy were the biggest losers, plunging by 49% and 39%, respectively, in April year-on-year.
Textiles and apparel performed better in April, at a 6% contraction compared to the same month in 2019, after an 11% plunge for the first quarter.
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