Global Trade Returns Faster Than Expected
Rebound isn’t being felt evenly across countries, and potential problems like a resurgence of Covid-19 remain
Research shows that global trade is rebounding much more quickly this year than it did after the 2008 financial crisis, lifting parts of the world economy and defying predictions the pandemic could send globalisation into permanent retreat.
Following the outbreak of the new coronavirus in January of this year, international trade in goods suffered the biggest year-over-year drop since the Great Depression. Economists warned of rising protectionism, and some companies said they would reassess overseas supply chains that were vulnerable to unexpected shocks.
Currently, trade remains below pre-pandemic levels. Still, it has snapped back robustly—and had recovered about half of this year’s historic loss by June, according to calculations by the Kiel Institute for the World Economy, a German think tank.
New export orders were growing in 14 of 38 economies measured by research firm IHS Markit in August, compared with just four in June. Others were trending in the right direction and could start seeing growth soon.
Households are spending on imported goods, sometimes supported by government cash, even as spending on local services like restaurant meals and trips to the cinema has fallen—and all those goods have to come from somewhere.