WALL ST. AIN'T MAIN STREET

Global trade plumbs lowest level since 2007 
WTO cautions rebound might take longer than expected.

The Volkswagen factory in Zwickau, Germany | Jens Schlueter/Getty Images

By GIORGIO LEALI
8/19/20,

Trade in goods hit the lowest level since 2007 in the second quarter of 2020 and a V-shaped rebound "may prove overly optimistic," the World Trade Organisation said on Wednesday.

During the second quarter of the year, global trade in goods registered a "historic fall" and touched the levels of the 2008 financial crisis. Wednesday's figure "was the lowest on record in data going back to 2007," the WTO said.

A "goods trade barometer" published by the WTO takes into account recent trends in order to draw a real-time trajectory of global trade. Wednesday's reading was 84.5 on a scale where 100 corresponds to a trade growth in line with medium-term trends. Automotive goods and air freight were the worst-hit.

Wednesday's data are consistent with a previous WTO forecast that merchandise trade would have fallen by 18.5 percent in the second quarter, the organization said.

The WTO also noted the first signs of a recovery next year but cautioned the rebound might take longer than expected.

"The heavy economic toll of the COVID-19 pandemic suggests that the projections for a strong, V-shaped trade rebound in 2021 may prove overly optimistic," the WTO said, adding that "an L-shaped recovery is a real prospect."