The World Trade Organisation (WTO) has revealed that global trade sank to its lowest level on record in June due to the COVID-19 crisis.
June’s Goods Trade Barometer (GTB) reading of 84.5 stood 15.5 points off the 100-point baseline and 18.6 points below that 12 months ago.
Although the new figure broke records, it should also be recognised that the WTO only began taking GTB readings in 2007.
The organisation nonetheless found that the June dip was “on par with the nadir of the 2008-2009 financial crisis”.
Merchandise trade generally fell by 18.5 per cent year-on-year, with automotive products and air freight (IATA) suffering the largest slump.
These indices fell to 71.8 and 76.5 points respectively.
The WTO noted that indices for electronic components and agricultural raw materials “held up relatively well”, at 92.8 and 92.5 points each.
Looking ahead, the organisation stated that “additional indicators point to partial upticks in world trade and output in the third quarter.”
However, it admitted: “The strength of any such recovery remains highly uncertain: an L-shaped rather than V-shaped trajectory cannot be ruled out.”
While the US stock market has reached fresh all-time highs in recent weeks, there is growing anxiety over whether this reflects a genuine recovery or it is merely the result of significant government stimulus and central bank intervention.
Furthermore, while the number of deaths has fallen dramatically since the pandemic’s peak in spring, coronavirus uncertainty continues to blight market sentiment.