The global trade has fallen sharply in the first half of the year due to the COVID-19 pandemic but rapid government responses have helped in tempering the contraction, according to the World Trade Organization (WTO).
WTO economists now believe that while trade volumes will register a steep decline this year, they are unlikely to reach the worst-case scenario projected in April, it said in a statement.
In April, the WTO stated that global trade is expected to fall by between 13 per cent and 32 per cent in 2020 as the COVID-19 pandemic disrupts normal economic activity and life around the globe.
"World trade fell sharply in the first half of the year, as the COVID-19 pandemic upended the global economy. However, rapid government responses helped temper the contraction," it said.
It said volume of merchandise trade shrank 3 per cent year-on-year in the first quarter and initial estimates for the second quarter indicate a year-on-year drop of around 18.5 per cent.
"These declines are historically large, but could have been much worse," it said adding that as things currently stand, trade would only need to grow by 2.5 per cent per quarter for the remainder of the year to meet the optimistic projection.
"However, looking ahead to 2021, adverse developments, including a second wave of COVID-19, weaker-than-expected economic growth, or widespread recourse to trade restrictions, could see trade expansion fall short of earlier projections," the WTO said.
Its Director General Roberto Azevedo said the fall in trade "is historically large -- in fact, it would be the steepest on record. But, there is an important silver lining here: it could have been much worse". It added that looking ahead to next year, a slower-than-expected pace of economic recovery would weigh on trade growth.
India is a member of the WTO since 1995. The Geneva-based body frames rules related to global exports and imports.