The World Trade Organization (WTO) has predicted that global trade growth would plummet by up to a third in 2020, leading to a massive recession worldwide following the coronavirus pandemic.
The Geneva-based organization predicted Wednesday that even the most optimistic scenario for this year was that trade would slump by 13%, a bigger fall than in the 2008-09 recession triggered by the banking crisis.
“As we face what may well be the deepest economic recession or downturn of our lifetimes,” WTO chief Roberto Azevedo warned in a statement on Wednesday.
“World trade is expected to fall by between 13% and 32% in 2020 as the COVID-19 pandemic disrupts normal economic activity and life around the world.”
Azevedo said the pandemic’s long-term effects are difficult to discern. “These numbers are ugly — there is no getting around that,” he said.
“The unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself,” he added.
He nonetheless said that “a rapid, vigorous rebound is possible.”
“Decisions taken now will determine the future shape of the recovery and global growth prospects.”
Depending on the conditions of the pandemic, worldwide trade could rebound in 2021 by between 21-24 percent, he predicted.
The number of coronavirus cases around the world has now reached 1,518,719, and 88,502 people have lost their lives due to complications caused by the viral infection, according to worldometers.info.
The new warning by the WTO comes as the world economy was already down by 0.1 percent in 2019 from the previous year, partly because of a trade war the US started with China.
Trump initiated the trade war with China in 2018, when he first imposed unusually heavy tariffs on imports from the country. Since then, the two have since imposed billions of dollars’ worth of tariffs on each other’s goods.
The world’s top two economic powers, however, signed a trade truce in January, letting businesses around the globe breathe a sigh of relief.